First, the en bloc sale committee must provide a preface to the CSA, listing the clause numbers and page numbers where important information, such as reserve price, apportionment method, etc, can be found.  Secondly, when an owner signs the CSA in Singapore, the lawyer appointed for the en bloc sale committee will have to be present to explain the legal terms and liabilities and address any doubts that the owner may have.  Third, an owner can rescind his agreement to be a party to the CSA within a five-day cooling-off period after signing the CSA for the first time. 

    The Bill also requires the sale committee to provide updates of the consent level every four weeks instead of the current eight weeks.  The updates on the consent level must also be certified by a lawyer.

Mode of sale: by public tender or public auction

     The amendments also seek to enhance the transparency of the mode of sale which, at present, is not regulated.  Firstly, at every launch of an en bloc sale, it  must be by public tender or auction. Following a tender or auction, especially one which fails to achieve the price acceptable to the sale committee, the sale committee can engage in follow-up negotiations for sale by private treaty with any bidder to get the best deal for the owners.  But any sale by private treaty must be concluded within 10 weeks from the close of the tender or auction.  Secondly, the sale committee must obtain from an independent valuer a valuation report on the value of the en bloc sale site as at the date of the close of the tender or auction on the same date.  Thirdly, the sale committee will be required to provide the owners with information on the bids received as soon as practicable after the close of the tender or auction or, where applicable, after the sale committee has entered into a sale by private treaty.

Return of moneys in management fund and sinking fund

    Sir, I will now talk about the return of moneys in management fund and the sinking fund.  Under the current law, the buyer-developer is entitled to the moneys remaining in the management fund and sinking fund upon the termination of the strata scheme following a successful en bloc sale.

    We have taken into account, Sir, feedback received and, therefore, the Bill makes a related amendment to the Building Maintenance and Strata Management Act (BMSMA) to provide that upon the legal completion of an en bloc sale, the moneys in the management fund and sinking fund of a management corporation shall be returned as soon as practicable to the owners of the lots in the development, in shares proportional to the contributions levied on the owners by the management corporation.

Conclusion

     Sir, in conclusion, let me say that the changes that I have highlighted are but the more major proposed changes in the Amendment Bill.

    These proposed changes will not apply to developments where the required 80% or 90% majority of owners, based on share value, have signed the CSA as at the date of commencement of this amendment Act.  These developments will not need to comply with the new requirements set out in the amending Act. 

    Sir, the public response to the proposed changes has been largely positive; although, of course, some have expressed concerns that the changes are too onerous while others are of the view that there should be even more safeguards.  I think this range of reactions is to be expected.  

    Let me reiterate that the amendments to the en bloc sale legislation maintain a careful balance.  They provide additional safeguards and ensure greater transparency for all owners but, at the same time, they have been drafted in such a way as not to make it unduly onerous to bring about an en bloc sale.

    Sir, I beg to move.

    Question proposed.

1.46 pm

     Dr Teo Ho Pin (Bukit Panjang): Mr Speaker, Sir, first of all, I wish to declare my interest as a subsidiary proprietor of a strata title development which is undergoing en bloc sale.

     Sir, I rise in support of the Bill.

     Sir, en bloc or collective sale is a complex property transaction, and can be time-consuming and costly.  In many cases, the process of getting consensus from subsidiary proprietors can be tedious and emotional.  The recent reports in the media have shown that collective sales have resulted in unprofessional practices and non-compliances with the Land Titles (Strata) Act (LTSA) by various parties involved in the sale. This has caused much unhappiness among some subsidiary proprietors who are calling for more protection of their rights, and a more transparent and fair process in conducting en bloc sale.

     Sir, since the amendment of the Land Titles (Strata) Act in 1999, a few hundred collective sales have been successfully transacted. This has provided many opportunities for these sold land parcels to attain higher development potential, thus addressing the challenge of land scarcity in Singapore.  Despite the increase in collective sales, many strata title developments are still faced with difficulty in convincing their respective subsidiary proprietors to go for collective sale.  Common barriers to collective sale include unrealistic reserve price, difficulty in contacting the subsidiary proprietors, different interests of owners, unfair apportionment of sale proceeds, non-compliance with the LTSA procedures, financial loss of some subsidiary proprietors, and non-monetary reasons such as emotional attachment, convenience or closeness to loved ones.

     Sir, I hope the proposed Bill will address some of these collective sale barriers, and facilitate the successful completion of more en bloc sales so that more land parcels can be better utilised to cater for an increasing population in Singapore.  Sir, I wish to highlight four areas of the Bill which I hope the Minister could clarify:

    (1)  Additional requirements based on floor area;

    (2)  Empowerment of the Strata Titles Board to increase sale proceeds for minority owners with valid objections;

   (3)  A more transparent and fair collective sale process; and

   (4)  Cooling-off period.

Additional requirements based on floor area

     Sir, I support the new additional requirements as stated in clauses 7 and 10 to obtain the consent of subsidiary proprietors or proprietors of lots with not less than either 90% or 80% of the total floor area of all the lots for developments which are less than 10 years or more than 10 years respectively.  Although this requirement will address concerns of minority shareholders, it may not facilitate en bloc sale as it will be more challenging to get consensus of owners of that required floor area.  In mixed developments, the owners of residential and commercial units usually have different interests.  Owners of residential units usually regard their units as homes and, thus, normally do not wish to go for en bloc. Commercial unit owners are usually driven by profits and operating costs.  Thus, they tend to be less emotionally attached to the development and pro- en bloc if there is good financial return.  This contradiction of interests among different types of owners will be further aggravated with the new requirements.  Thus, I wish to seek the Minister's clarifications as to whether the Minister can elaborate on how this new requirement can facilitate en bloc sale, especially in mixed developments.

Empowerment of Strata Titles Board

      Sir, the new subsections 5A, 5B, 7A and 7B empower the Strata Titles Board to increase the sale proceeds for minority owners who filed valid objections subject to an aggregate sum limit.  It is not clear how much is this limit and whether this limit should be decided at the AGM when the collective sale committee is formed.  To facilitate en bloc, I propose that a lump sum (equivalent to what we call a contingency sum) should be set aside at the beginning, so that the collective sale committee can refer owners who object to the sale to the Strata Titles Board for a settlement. In this way, the interests of all owners will be better protected, thus minimising disputes among the owners.

    Sir, with the increase in en bloc sales, there is also a need to consider increasing the panel of Strata Titles Board members. I understand that the present workload of the Strata Titles Board members is heavy and, thus, this may delay the completion of many en bloc sales. I propose that the Ministry consider appointing more Strata Titles Board members from the various professions so as to expedite the processing of en bloc sales and settlement of disputes.

Collective sale process

    Sir, many subsidiary proprietors and proprietors are not familiar with the Land Titles (Strata) Act, and the procedures for en bloc sale. As such, there are often disputes arising from the collective sale process. We should provide a simple and clear legislative framework to ensure that en bloc sale can be transacted in a fair and equitable manner.  I fully support the new subsection 1A which requires a collective sale committee to be constituted at a general meeting.  In addition, the new Second, Third and Fourth Schedules of the Bill will provide clearer rules for the collective sale committee to comply.  The three Schedules have addressed contentious issues such as the appointment of advocate and solicitor, property consultant or marketing agent, apportionment of sale proceeds, terms and conditions of the collective sale agreement, information on sale process to owners.  These new requirements, which will be tabled as resolutions during general meetings, will make the collective sale process more transparent.

     Sir, I would like to propose to the Ministry to consider designing a set of standard collective sale forms to facilitate these compliances. Having standard forms will remove any ambiguities and omissions which may render the sale process invalid, thus wasting resources and causing a lot of lawsuits.

     Sir, the Bill, however, does not address a number of barriers to collective sale such as uncontactable owners, fixing of date of vacant possession, and non-monetary factors.  We know that in the HDB's upgrading programme, we often cannot locate or contact about 2% to 5% of flat owners. As such, they are always regarded as "objection" votes.  As for the strata title developments, I am not too sure whether non-contactable owners should be regarded as "minority owners" with valid objections.  If that is the case, the Strata Titles Board must be empowered to decide for these non-contactable owners.  Sir, the LTSA must address this problem of non-contactable owners, and consider its status in a collective sale.  I hope the Minister can clarify on how we should treat non-contactable owners in an en bloc sale.

     Sir, one common problem faced by owners in collective sale is the fixing of vacant possession of their properties.  It is almost impossible for all owners to agree on a same date as each one of them has their own requirements.  I propose that the Act should provide a fixed duration where vacant possession is to be handled over to the purchaser of the collective sale (probably 12 months after the receipt of sale proceeds).  In this way, we can minimise disputes over the fixing of vacant possession date.

Cooling-off period

     Sir, I fully support the introduction of a five-day cooling-off period to rescind the collective sale agreement.  This will further protect the interests of owners, and prevent unprofessional practices by property agents to lure owners into signing the collective sale agreement.  Clause 20 which requires the signing of collective sale agreement to be done in the presence of an advocate and solicitor will further prevent such unprofessional practices.

     Sir, the proposed Bill will further add clarity to the collective sale process of strata title development.  It will facilitate en bloc and remove some ambiguities, thus making the collective sale process more transparent and fair.  As there are many strata title developments presently undergoing en bloc, I would like to seek clarifications from the Minister as to whether the amendments will affect these developments retrospectively. 

     Sir, I support the Bill.

1.56 pm

     Mr Alvin Yeo (Hong Kah): Mr Speaker, Sir, this Bill marks an important step in the evolution of a quintessentially Singaporean innovation - the en bloc sale. I said "quintessentially Singaporean" because the subject tends to possess the features of a local soap opera.  Especially nowadays, we have neighbours squabbling, different factions, legal suits, money, sometimes, lots of it.

But what is often overlooked is the important policy that underlies the en bloc sale, which is to spur redevelopment of ageing estates in our land scarce country,  and any legislative amendment that furthers this policy should be supported.

     This Bill contains several amendments that enhance the en bloc sale process, either by injecting greater certainty, giving greater flexibility to the Strata Titles Board and improving the protection for owners.  These include the addition of a second condition for consent based on the total area of lots.  This is a good move because share values are sometimes not correlatable to the actual proportion of built-up land area, and this will make the obtaining of consent a fairer process.

     Another welcome change is the power of the Strata Titles Board to allow applications that have technical errors, provided they do not prejudice any owner, and to allow such errors to be rectified.  All these changes are and should be welcome.

     There are a number of other areas of change where I feel the changes do not go far enough.  But perhaps before I talk about them, I should just disclose my interest as a partner in a law firm which is involved in various en bloc transactions.  This includes acting for one of the members of the consortium that bought the Horizon Towers project, which is obviously the subject of litigation today.

     I should clarify that my remarks are directed at similar situations that could arise in the future.  The Horizon Towers case is before the court and should be dealt with by the court.

     The three areas on which I wish to comment relate to the regulation of the sales committee,  the definition of "financial loss" which the Strata Titles Board is entitled to take into account in deciding whether to approve or reject the sale and the regulation of the collective sale agreement.

     First of all, in terms of the regulation of the sale committee.  The changes provide that the committee members must have certain qualifications, and one of the key qualifications is that he must not be a nominee of someone who owns a number of units, such that this owner of several units ends up with nominees of a greater proportion than his share of the total share value or, in any case, not having more than 49% of the members of the collective sale committee.

     There is also a disclosure of interest provision, as the Deputy Prime Minister mentioned, whereby someone standing for election has to disclose his interest, direct or indirect, in any property developer, property consultant, marketing agent or legal firm.

     Mr Speaker, these changes are welcome, as they attempt to ensure that there is fair representation that no one person or group can dominate the committee and the sale process.  However, the disclosure of interest provision, in my view, does not go far enough.  Given the importance of the safeguard that no one owner of several units would be allowed to dominate the sale committee, it should be incumbent that any nominee must disclose in full any arrangement by which he represents the interest of another, whether it is through family relationship, a nominee arrangement, trust arrangement or other vehicles.  This is to allow the prohibition against one party unfairly dominating the sale committee to have teeth.

     Further, I believe that this Bill should seek to make the powers and duties of the collective sale committee clearer. For instance, does the committee act as an agent for the majority owners?  Or is its role more akin to a board of directors?  Does the committee owe fiduciary duties to the owners and can they be sued for breach?  What is the standard for performance of their duties, given that many of these people are not legally trained or not from the property industry and are doing this on a voluntary basis in their spare time?

     We should bear in mind that the owners entrust the sale process to the sale committee, and very few owners who sign a collective sale agreement actually bother themselves with the details of the process.  And, of course, if the requisite majority is obtained, the minority owners, subject to their right to appeal to the Strata Titles Board, are swept along by the process.  It is important that the committee should have their duties and responsibilities spelt out clearly so that all parties know what they can expect or cannot expect from the committee members.

     On the flip side, the committee members should also know what immunities they have if they carry out their jobs diligently and honestly.  One illustration involves the Horizon Towers case.  Was it the committee's responsibility to make a proper application to the Strata Titles Board or was it each individual owner's responsibility?  Can individual owners be sued and can they, in turn, seek an indemnity from the committee if it is proved that the application to the Strata Titles Board was indeed defective?  In my view, it is important to clarify these issues for the future.  As mentioned before, the Horizon Towers case should be left to the courts and the parties involved to decide and to resolve.  But it is important to address this issue because, otherwise, owners who would support a sale may refrain from signing a collective sale agreement because they fear the potential liability that could engender, which itself would defeat the important social policy of encouraging the redevelopment of our older estates.

     The second area I wish to comment on relates to the definition of "financial loss" which the Strata Titles Board considers in deciding whether or not to approve or reject a sale.   The change here does inject greater certainty by spelling out four examples in the Fourth Schedule of what are deductions.  But there is still room for argument, because the provision says that the Board may allow whatever deductions as they see fit, including these four examples in the Fourth Schedule.  I do ask the question  whether the Bill should go the entire way by spelling out the exhaustive list of deductions so that the position is made clear to any owner as to what can or cannot be counted in deciding whether or not to make an application to the Board.

     I would like to raise the issue of one specific deduction which I say should be counted, and that is CPF monies or interest thereon.  That is not listed in the Fourth Schedule, and indeed there was a case involving the Waterfront View in April 2007 where the Strata Titles Board rejected an owner's objection on the ground of financial loss, because there was a shortfall in terms of the CPF monies and interest to be refunded to the member's CPF account.  Because the CPF Board did not require him to refund that interest in full, that was not held to be a financial loss.

     Mr Speaker, Sir, this House has just spent three days debating the important changes to the CPF system.  Given the importance of CPF savings, I do suggest that the CPF monies and interest thereon to be refunded to a member's CPF account upon the sale of his home should be treated as a permitted deduction as it does represent a real asset of that owner.

     The third area that I wish to touch on relates to the regulation of the collective sale agreement.  As the Deputy Prime Minister has stated, this will include a preface to set out the key factual information of any sale, including the reserve price, apportionment method for the proceeds of sale, and it does provide for the collective sale agreement to be signed in the presence of an advocate and solicitor.

     I also note the Deputy Prime Minister's statement that it is intended that this collective sale agreement be explained by that lawyer to the party who is signing it.  However, that is not expressly stated in the Bill, and I would suggest that it would be advisable to, in fact, include a requirement that the collective sale agreement is to be explained by the lawyer.  In addition, the presence of a lawyer is only required where the agreement is signed in Singapore.  And, of course, the question does arise if a substantial number of owners do reside overseas, what is the protection they receive under such a provision.

     The cooling-off period is also a good move to allow any owner to change his mind if he has been unduly pressured in signing the agreement or for any other reason.  However, I do opine that the proposed regulations, while an improvement on the current regime, do not go far enough in regulating the collective sale process.  There is still a great deal of latitude given to the sale committee and, sometimes, their lawyers and consultants, and many issues could arise therefrom.  For example, what is the length of the mandate that is given to the collective sale committee or to the marketing agent?  How long does the reserve price remain valid? Who exercises the option to extend the time for fulfilment of conditions?  In most cases, from my experience, the period for a mandate or reserve price is about a year.  In a fast-moving market, even six months is a long time.  And the reserve price given in the mandate may become outdated after a while, and indeed that was one source of unhappiness in the Horizon Towers case.

     Where there are important or differing interests to be considered, our legislature has seen fit to impose standard terms and conditions, or even a standard form of agreement to protect these interests.  One example is the standard housing developers' condition and standard form sales and purchase agreement under the housing developers' rules.  This is designed to protect buyers who have handed over the purchase price by ensuring that monies are kept in a separate account to be used for completing the building.  I would propose that the Act spell out standard terms and conditions and, indeed, a standard form agreement for collective sale.

     There are differing interests at stake.  The majority owners, most of whom have no real control over the sale and they would entrust it to the sale committee.  And, equally important, the minority owners whose wishes not to sell are being over-ridden by the majority.  A standard form agreement would reduce uncertainty as well as the scope for unfair dealing and, hopefully, avoid disputes.  With such an agreement, the rights and liabilities of all parties, including the sale committee's duties and immunities, could be balanced and spelt out.  The issues of mandate, reserve price, options for extending time and appointment of professional advisers can be addressed with certainty.  Overall, with greater certainty, this will facilitate the en bloc sale process.

     Mr Speaker, overall, the changes are a useful step in the right direction, and I do support the Bill.

1.55 pm

     Ms Ellen Lee (Sembawang): Mr Speaker Sir, like the two speakers before me, I declare my interest in this matter.  I do not have any property affected by en bloc sale nor do I represent anybody affected by en bloc sale.  My interest in speaking on this topic is purely from a follow-up of what I have spoken at the Committee of Supply last March, and also because I have a few friends who are affected by en bloc sales and have been supplying me with ideas and ammunition.

     Mr Speaker, Sir, I applaud the Ministry of Law for amending the Land Titles (Strata) Act to enable the Government to address concerns of transparency and due process in the execution of en bloc sales.

     Sir, in the past two years, while we saw many Singaporeans benefiting from en bloc sales, we also witnessed quite a number feeling frustrated and angry, and some of them probably may still feel bitter after the new changes become law. Much as we hope to achieve and safeguard the interests of everyone affected, we cannot always meet the needs and wants of everyone. This is especially so in the case of the changes to the law on en bloc sales.

     Sir, having said this, I am heartened to learn that in the proposed legislative changes, the Government has taken cognisance of the many grievances, proposals and suggestions that have been aired at various platforms, including engaging the public through public consultations as early as April this year by listening carefully to the feedback and suggestions and brainstorming with some affected parties to hear them out. I applaud the Ministry of Law for doing this.

     Under the Amendment Bill, we see a raft of changes. Some of the notable key amendments are the changes done in ensuring the proper balance of voting rights in the case of mixed development. The improvement of 80% - 90% rule

to include BOTH the share value and unit area has indeed been properly thought through to help and protect the minority, as some would have argued otherwise before the change was made. I empathised with those who had previously been adversely affected in one way or another. I feel that the Government has tried its best to be fair and, in this case, carefully addressed concerns of the minority to ensure that this group will now not be prejudiced.

     There has been much talk amongst owners who complained that they were not consulted before the start of a collective sale in their estate or the formation of a sale committee. The proper set-up of the Collective Sale Committee and its legal standing has been adequately addressed, including the rules to govern. The Government seeks to ensure that any sale attempt can start only if the owners have discussed the matter at a general meeting and agreed to proceed to explore possibilities of a sale. Also, currently, lawyers are not required to be present at the signing of the collective sale agreement. The new amendments seek to ensure proper advice is given to the "less educated" owners through the presence of legal counsel and regular updates. All these new changes are commendable and I applaud the Ministry of Law for accepting several constructive suggestions from the public to make the en bloc sale process more transparent and better protect owners who are legitimately selling or not deciding to sell their premises.    

     Sir, there is one area that I would like to highlight to the House today which I feel the Government can do more. The protection of the ignorant, the ill-informed and the ill-equipped, mainly the elderly, is one particular area that the Government can explore to safeguard as part of this Amendment Bill. With our ageing population and more dysfunctional families, there will be many more elderly Singaporeans living alone without trusted or sound counsel at such critical times when the loss of their homes is imminent. To this group of people, especially the older folks who are frail and weak and possibly living alone, I hope we could consider their plight and promulgate ways to protect their interests. I personally know of some elderly persons staying alone for more than two decades who are negatively affected by en bloc sales of their properties. 

     Last year, the Committee on Ageing Issues (CAI) in its Report on Ageing Population, vide a Media Release dated 8th February 2006, came out with some suggestions to achieve successful ageing for Singapore. I could not agree more with one of the calls made by the CAI, ie, to urge the Government to work with the private and people sectors to provide and ensure the old retain a roof over their heads.

     Sir, in the case of en bloc sales, I hope that the Government can consider this particular segment of our population. It is a fact that senior citizens view security and stability as paramount in their golden years. In the past 40 years, the Government has succeeded in housing more than 85% of our population in affordable public housing. HDB goes a step further to provide replacement units for those affected by SERS. To those not living in HDB flats, this security is no different as it also means a roof over their heads. It is important to help them secure their nest eggs as they have toiled for many years to preserve them in the hope of living there peacefully till they die. For the elderly living in affected collective sale properties who are against the sale, we should try to minimise their sufferings from a reverse eviction from their legitimate homes. To them, the strong sentimental values in the place they stay far surpass the monetary gains. Moving to a new place would also pose as a hurdle, considering some of their physical, mental and emotional states.

     Sir, I urge the Government to try to strike a balance between avoiding ghettos and the need to protect the elderly, especially the frail and weak. Yes, I do acknowledge that under the Amendment Bill, the Ministry of Law already seeks to ensure that owners are consulted and be protected from being kept in the dark on the sale process. The presence of lawyers also helps to ensure that the elderly owners are not being forced to sign the collective sale agreement under duress and that they are clear about the terms and fully aware of the implications of the agreement they have signed or about to sign. But I believe the Government could do more to help the elderly.

     Sir, may I propose that, additionally, the Government consider letting elderly owners, aged 65 and above and living alone, have a one for one exchange in the new development so that they can continue to stay in the same locality they are most familiar with and to minimise the trauma of uprooting, searching for another home and all miscellaneous attendant problems attached to moving? Furthermore, could the Government consider developing a set of "Guidelines for Best Practices in Collective Sales of Private Properties" - I think akin to what my two learned colleagues have said a while ago about having prescribed forms and conditions - to ensure that all parties involved in a collective sale, including the developers and marketing agents, comply with them so that they could minimise disputes and unnecessary litigation?

     Sir, with that, I support the Bill.

2.18 pm

     Ms Irene Ng Phek Hoong (Tampines): First of all, I welcome the proposed changes in the Bill to make the entire en bloc process more transparent and fair. Indeed, one positive thing about this debate is that Singaporeans should be made more aware of the rules of the game when it comes to en bloc sales.

     Sir, if I may say so, the en bloc story has turned out to be a tangled tale of greed, fear, love and betrayal, with poignant twists and turns, as some people become rich and elated, and others homeless and somewhat depressed. There is skulduggery and the occasional violence reported. Eric Khoo and Royston Tan need not look very far for their next film plot.

      If I may deal with each facet of the plot in turn:

     First, the human dimension of greed, fear, love and betrayal.

     The en bloc trend seems to bring out the worst in some people, turning neighbours against one another, especially during a property boom. Although it is not openly said, the general feeling is that greed - and also fear - has turned many reasonable neighbours into angry enemies.  Family members also turn on one another. I know of at least one case where a middle-aged couple divorced as a result of the en bloc sale of their estate.

     It also breaks apart a community as they are not likely to live together nearby in the same constituency after their estate goes en bloc. The strong community ties built over the years are all but torn apart, especially for residents in privatised HUDC estates who have bonded from their HDB days. Tampines Court, which is in my constituency, is one of the casualties.
 
     The en bloc fever has driven up property prices to dizzy heights, adding to the pressures. Many residents involved in en bloc sales are stressed by the entire process, especially those who object to the sale. Their worries include buying a replacement flat that will allow them the same ease and quality of life. But, given the high property prices, they have to either downgrade to a HDB flat or move to a smaller, more crammed private flat. The pain is more acutely felt by those who have retired or are retiring soon. They are unable to obtain bank financing and have to draw on their hard-earned savings. The legal costs to pursue one's case to the bitter end have also been a point of stress for many.  I know that many people have been made millionaires through en bloc sales.  It can be a good get-rich scheme for many, better than striking lottery.  We know of  "serial en blockers" - people who buy properties that are expected to go en bloc just to reap the profits of a collective sale and then move on to the next one.  I have heard of one person who was involved in 66 en bloc sales, and made a total of about $200 million from his buying and selling spree.  But such windfall is at quite considerable cost to others - social, emotional and personal cost.

     Sir, if I may compare the spirit of en bloc with that of HDB SERS (the Selective Estate Redevelopment Scheme). SERS has tried to preserve the strong community ties by assuring residents affected of another flat in the new site, so that they can choose to live with old neighbours again or pick flats elsewhere. Why not apply this guideline to private en bloc as well?

     Can the Minister look into adding a provision that developers should offer a replacement unit in the same estate to residents as an option at an affordable price? This way, economic considerations can be balanced with social ones. It can also help address the genuine concern of residents who enjoy living in the same area and have built up strong community ties over the years, and also help assuage the worries of residents about being able to afford another flat elsewhere.

     The en bloc plot has a second element, which is that of coercion.

     There have been allegations of harassment and intimidation on the part of some sale committees or marketing agents. The reports can be quite serious. I have heard of one case where a resident received an anonymous call threatening the life of his daughter if he did not consent to the sale. Some complained that they signed the collective sale agreement under duress or false representation.

     The Minister mentioned, in his answer to my oral question at the last sitting, that any owner who at any time feels that he is being harassed or intimidated to consent to an en bloc sale may lodge a Police report.  Can I ask him how many such reports have been received each year, and what is the most serious received to date? And has any been received against marketing agents and, if so, does he discern a pattern?  Also, what actions, if any, have been taken by the Police with regard to reports on harassment specifically related to en bloc sales? It would be useful to highlight these cases so that all are put on notice that such practices are an offence and, hopefully, more civil and restrained behaviour will be the norm in future en bloc sales projects.

     Third, are the twists and turns of the property market, and sub-plots leading to blind alleys.

  
     Sir, we know that one reason for the unhappiness of those affected by en bloc is that en bloc prices which appeared fair some months ago, now suddenly looked paltry. As a result, many have been scrambling to see how they could get out of the deal, signed when property prices were lower, and are angry at their sale committees, marketing agents and lawyers for not getting them the latest best price. Residents then begin to question if the sale committee, marketing agents and lawyers are representing their best interests to get the highest possible price or selling them out for a quick buck.

     The proposals in this Bill go some way in addressing such grievances. They include requiring the sale committee, and its members, to be elected at a general meeting.  The proposed Bill also ensures that the residents are kept informed and involved in appointing lawyers and marketing consultants at general meetings.  The requirement for a formal valuation at the close of tender will also give residents a better sense of the value of their property, which it must be highlighted, can be either up or down.

      The proposal to have a lawyer present to explain the legal terms and liabilities is also prudent, so that residents know what is it they are signing up for, and not just sign buta. But as hon. Member Alvin Yeo pointed out, the liabilities for residents need to be spelt out more clearly.  We learn through the Horizon Towers' case that the majority owners can be sued for breach of contract.  But some of the minority owners are a bit jittery now because they have heard that they can be also sued for inducing breach of contract by encouraging some majority owners to jump camp.  Can I ask the Minister to clarify the liabilities faced by majority owners as well as minority owners who tried to get out of the collective sale agreement?

     It is true that the amendments, in general, will mean extra legal costs will be incurred, and this may be a concern for some outside the House.  But it should, hopefully, protect the less literate and less street-savvy residents who need clear and simple explanations to make an informed decision, assuming that lawyers will do their best to make things clear to residents and not more opaque.

      Sir, I support all these measures. But can I ask the Minister, what if the lawyer appointed - and this is not hypothetical, it is human - after going through the 300th resident, and some estate can be very big, even with 500 residents, and the lawyer after going through each owner signing a sale agreement, and the 501st resident comes along, the lawyer, being very tired, summarised things and did not explain things clearly to the resident?  Can the resident then lodge a report against the lawyer for not doing his job properly, and the lawyer being hauled up for sanctioning?  Can these be grounds for the resident to claim that he has been misrepresented when he signed the agreement?

     Many people reckon that the real winners from these amendments - the superstars in the en bloc plot as it were - will be the lawyers, because they will be earning much higher legal fees because of the many requirements.  I think it is important to highlight that it will not be easy money.

     Underlying the en bloc plot are sinister undertones of occasional collusion, particularly between marketing agents and potential buyers. It is important to place greater scrutiny on the role of marketing agents, to impose greater discipline on their code of behaviour. Marketing agents can get quite a lucrative success commission for getting an en bloc sale through. In some projects, they have been found to be overly aggressive in their bid to get signatures. I have also heard of marketing agents who collude with developers to secure en bloc packages at the expense of the sellers' interest.

     For example, as we know, in one development, Horizon Towers, I understand that the marketing agent told the residents that he will not charge any commission for his services.  But what he did was to work with the developers to take a commission from the buyer's side.  I checked with the industry and found that it is not an isolated practice for marketing agents to have quiet collusion with the developers behind the scenes.   In this sense, I ask for more transparency to ensure that whatever collusions or whatever arrangements have been made with the buyers be made clear to the residents.

     The proposals to enhance the transparency of the sale process are therefore welcomed.  But can I ask the Minister if such seemingly underhanded practices - such as collusion between the marketing agents and developers at the expense of owners  - can be cause for a collective sale to be called off?

     Finally, overarching the entire en bloc plot is the aesthetic and green dimension.  W e should review the present provision that allows the estates below 10 years to go en bloc. Ten years sound very young.  These buildings are not considered old and are structurally sound and some are even aesthetic, reflecting the latest architectural style.  It is also not environmentally friendly to tear down perfectly sound structures only to build something almost similar, only more expensive and more densely packed.

    Sir, I am not sure how the en bloc plot would end.  But I would say that to many Singaporeans, especially older Singaporeans, what they want is a home, with some sense of stability and security, a place where they can sink their roots and build meaningful memories that can last a lifetime.

    But the en bloc phenomenon pays little respect to such sentiments.  I think, if allowed to be carried to extremes, the en bloc trend can be unhealthy and can indeed set back our dreams of making Singapore a place where you feel you can belong.

     I would urge the Minister to monitor the pace and practice of en bloc sales and make sure that it does not put social cohesion at risk of the swing of the wrecking ball.

3.29 pm

     Assoc. Prof. Kalyani K Mehta (Nominated Member): Thank you, Mr Speaker, for allowing me to speak today on the Land Titles (Strata) (Amendment) Bill.  The long-awaited amendments to the Land Titles (Strata) Act were announced last month following the public consultation exercise and focus group discussions which they called us as well as members of the public.  Following the First Reading in Parliament, there have been many comments made through the media - some positive, some negative.

     Before I move on to address these, I would like to make some comments on the social consequences of the en bloc fever, as we now call it, in Singapore over the last couple of years.  If social communities have to be swept away in the prospect of progress and a cleaner, healthier environment for the people of a nation, such as when the kampongs were eradicated in Singapore, it is a phenomenon that the majority of the population would accept.  In the case of the en bloc or CSA, it is basically greed on the part of some subsidiary proprietors and fly-by-night investors as well as hunger on the part of developers that is driving the whole movement in Singapore.

     It is true that property prices had been low in the past 10 years or so, and this en bloc fever has helped to hasten the increase in property prices.  But at what cost?  Is it a case of economic gain but social disruption?  I have noted cases where older persons who have a strong emotional attachment to their homes have been heart-broken when they have had to succumb to the majority's vote to go for the en bloc sale.  I could not agree more with my colleague, Ms Ellen Lee, who spoke in detail about the effects of the en bloc sales on elders. 

     Additionally, the whole communities that have been built over decades when the neighbours know one another very well and have been a source of companionship and support are literally destroyed overnight.  And in a few botched-up deals, such as Horizon Towers and Gillman Heights, the acrimony, hostility and anger that have followed are unparalleled.  On top of this, many families are stuck in a financial squeeze due to the unforeseen trail of events, and this squeeze could run into millions.  Unethical conduct on the part of one or more of the parties concerned has also become the talk of the town.

     Looking at the high social costs, the clear legal and procedural controls over the whole process in the amendments are welcomed by Singaporeans.  It is hoped that unwitting home owners and unscrupulous dealers will be equally warned of the consequences.  However, I have four suggestions to improve the process further and ensure that implementation of the changes will be fair and helpful for Singaporeans. Let us first look at the scenario of condo raiders - I will spell it "condo", just for clarification - a term coined by Ms Alison Taylor in a letter to the Forum page of the Straits Times on 16th August.  Condo raiders are short-term investors who buy one or more units in a private condominium and, within a couple of weeks, start agitating for en bloc sale or CSA.  They campaign for CSA and often succeed in getting into the collective sale committee.  Such persons are very savvy and familiar with the proceedings of conducting a sale.  So they have the confidence to persuade home owners to go with the deal.  Many of the subsidiary proprietors are not familiar with the legal processes.  So they are tricked into signing the agreement.  Condo raiders have made handsome profits in their en bloc deals and I believe even the new amendments will not be sufficient to stop them in their raids.

       In view of this, I have my first suggestion. A minimum period of residence should be stipulated as a criterion for being elected into the collective sale committee.  In my opinion, the minimum period should be two years.  Currently, there is no criterion of such a nature in the new amendments.  Setting such a criterion would be an obstacle for these condo raiders in the form of protection or safeguard for the authentic home owners.  I hope the Minister will seriously consider this proposal.

      Mr Speaker, my second suggestion relates to the section on disclosure of interest in the Third Schedule of the Bill, on page 32.  While the section drives home an important point on the need for disclosure of any interest that could be in conflict with the role and duties of an elected member of the collective sale committee, it does leave some room for thought.  I think that the words "as soon as practicable" in the sixth line leave much to the imagination.  There should be at least some sense of urgency when a person finds out that there is some conflict of interest in his role as a member of the collective sale committee.  And I feel that, to reflect such an urgency, an added phrase like "within 48 hours" or 72 hours is important so that the importance of the section is upheld.   In addition, there is no mention of the consequences for the person who does not disclose his or her conflict of interest.  I would like to suggest that the violator of the conflict of interest policy be liable to legal action.  Such a strong statement in the Bill would act as an effective deterrent.

     My third suggestion is that a code of best practices needs to be drawn up and circulated perhaps in hard copy at relevant public organisations like libraries as well as softcopy on the Ministry's website, and I believe my earlier hon. colleagues have also made some mention to such a code.  A code like this would state the best practices to be followed by the lawyers, developers and even sale committee.  This could serve to guide the Singaporean public in this matter of collective sale agreements.

     My last suggestion is that the Ministry or STB set up a special small unit to look into the complaints of stakeholders of an en bloc negotiation in order to troubleshoot.  Conflicts could be averted.  Gullible home owners could be made more aware of their rights, for example, those who are in the elderly category, and misunderstandings could be cleared through such a unit.  Sometimes, a minor intervention at the early stages could prevent problems from escalating.  In the long run, the collective good or benefits would far outweigh the initial outlay of resources to be spent to establish such a unit. 

     Mr Speaker, Sir, it is important that we, as responsible Singaporeans, try to maintain the cohesion of our society.  When communities of people who have lived in peace and harmony are destroyed, we are paying a very high price because it takes decades for such living organisms as communities to be formed.  On the one hand, we have the Community Development Councils (or CDCs) who aim to build strong communities through programmes to bond people and, on the other hand, we watch the fast disruption of communities without really valid reasons.  And I also echo Ms Irene Ng's comments on the green aspect of destroying buildings below 10 years old.   While there is no reason to stop people to sell their old homes and to buy new ones, when it is done in deals that affect large numbers of families, and from recent statistics provided by the Minister, at least 3,700 families were involved in these residential units since 2005, the State has to make sure that the process is fair and good for the people, and not just a profitable venture for a selected few.  It is my hope that the Deputy Prime Minister will give due consideration to these suggestions.

2.39 pm

     Mr Siew Kum Hong (Nominated Member): Mr Speaker, Sir, I rise in support of the Bill.  But first, I should declare my interest such as it is, in this matter.  My girlfriend's mother's estate is currently undergoing a collective sale process.

     Sir, there has been a great deal of attention on collective sales in recent months.  The ongoing Horizon Towers case has shown up some of the inadequacies in the existing legislation.  It is also a cautionary tale on the potential repercussions when things go seriously wrong.

     At the same time, there is a lot of unhappiness with the status quo.  From anecdotal evidence, a lot of owners are unhappy with the ongoing en bloc efforts in their respective estates.  Some do not want to sell.  Some feel that the proposed sale is unfair to them.  Some believe that they will be unable to obtain an equivalent replacement unit in the current market.

     And the unhappiness is not limited to locals.  Expatsingapore.com is an online forum that is very popular with foreigners, and many of them have posted negative comments on the forum about their unhappy experiences, either as minority owners or as tenants forced to leave their "en bloc-ed" homes at very short notice.

     All the shenanigans surrounding en bloc efforts have adversely coloured many foreigners' perceptions of Singapore as a safe, secure place, where the system works in a fair and transparent manner.  It is not uncommon to see comments from foreigners about wanting to leave Singapore and never coming back, because of how they are being treated either as tenants or as minority owners.

     That is the context within which this Amendment Bill is being debated.  And this Bill is long overdue, given the long simmering complaints about the current legislation.

     Indeed, I understand that many developments have been rushing to obtain the requisite 80% approval threshold for their collective sale agreements before this Amendment Bill comes into effect.  That is so that those sales will come under the current legislation, and avoid the new rules.

     That is, to my mind, testament to several things: the extent to which the current rules are perceived to be "pro-sale", the extent to which the new rules are seen to correct that imbalance, and the blatant disregard of many collective sale committees

(CSCs) for notions of fairness and the interests of minority owners.

     Sir, there are many positives in the Amendment Bill.  It creates a statutory footing for the sale committee as a committee elected by the management corporation in a general meeting.  It injects a tremendous amount of sorely needed transparency into the collective sale process, a process that has come under severe criticism, criticism which, in my view, is wholly justified.  That being said, there remains a significant omission from the Bill.  The Bill seeks to do a lot of things but they are primarily aimed at ensuring procedural fairness.  The Bill does not appear to do much in terms of substantive fairness which, in this case, would centre around the method of apportionment of the sale proceeds.  It is as if we are saying that it is enough for the form to be proper and never the substance.  In particular, the Bill fails to address the matter of apportionment of sale proceeds.  That is possibly the single most contentious issue in an en bloc sale.  Indeed, the Deputy Prime Minister had, in a written answer to my question provided on Monday, disclosed that this was one of the most common grounds of objections raised by minority owners to the Strata Titles Board.

     Sir, I understand that all collective sales in Singapore adopt one of four methods of apportionment recommended by the Singapore Institute of Surveyors and Valuers.  These four recommended methods are by:

     (1)  Share value;

     (2)  Strata area;

     (3)  Average of share value and strata area; and

     (4)  Valuation and share value excess.

     The SISV also recommends "any other method" which sounds like an oxymoron to me.  But I understand that "any other method" is commonly understood to mean any combination of the above four methods that is fair and equitable. 

     Unfortunately, the SISV does not also provide recommendations and guidelines on when each of the methods should be used.  That has somewhat inevitably led to CSCs selecting the method which is most likely to achieve the requisite majority to approve a sale.  There may be a perfunctory attempt at justifying the method being adopted but this is seldom satisfactory.  Since the pot of sale proceeds is finite, the chosen method usually advantages the majority, to the detriment of the minority who are normally the owners of the bigger units. 

     It seems to me a little irresponsible of the SISV to recommend methods of apportionment without also providing detailed guidelines on how to apply them in a fair and equitable manner.  It is tantamount to giving a loaded gun to a soldier without also providing the necessary training and guidance in its usage.  Is it then any wonder that the recommendations are frequently abused in such a manner as to effectively oppress minority owners? 

     It is true that when the majority owners apply to the Strata Titles Board for a collective sale order, they have to include a valuation report on the matter of apportionment use.  But this seems to be more an exercise of going through the motions than of truly independent and critical evaluation and consideration. 

     Let me just cite the example of a valuation report that I have seen.  In this case, the report basically set out and described the different methods of apportionment, without any critical analysis of the applicability or suitability of each method to the development in question.  The valuer then proceeded to state its recommendation, which just happened to be the method that the sale committee had already chosen.

     The valuer opined, and I quote:

     "In view of the above methods and having regard to all relevant information, we are of the opinion that the 50% share value and 50% strata area method is a fair and equitable method of apportionment.  We also understand that this method of distribution has also obtained the endorsement of more than 80% of the owners in the Collective Sale Agreement."

     There was no analysis, no explanation, no justification.  Just a bald assertion that the method in question is a fair and equitable method, with a telling reference to the endorsement of the majority owners.  No reference to the other methods of apportionment recommended by the SISV.  No comparison of the relative merits of each method.  No statement as to whether this method is more fairer and more equitable than the others, or whether any other method would be more fairer and more equitable.

     Sir, if that is not simply going through the motion, I do not know what is. 

     It does not help that Singapore is small and the industry is small.  Everybody knows everybody else.  A valuer who provides a report that does not meet a marketing agent's requirements will probably not receive any more work from that agent and probably any other agent.  Bearing in mind the critical role played by marketing agents in this entire process, including suggesting and recommending valuers for such reports, everyone has a vested interest in not rocking the boat.

     Indeed, I have been told by a minority owner who was in the pro-tem CSC for his estate that the marketing agent in his case actually told him that the agents will always ensure that their regular surveyors are engaged and that their regular surveyors will always agree with their proposed method.

     Sir, all this simply means that when it comes to the single most important issue in an en bloc sale, minority owners are left with little protection from the law.  The law creates a mechanism that permits and facilitates the collective sale of estates which, in itself, represents a significant derogation from property rights in the first place.  And then the law fails to go on to ensure substantive fairness.  I personally believe that to be a major failing in the system.

     Be that as it may, it seems to me that the Ministry has consciously decided to adopt an approach based primarily on procedural fairness.  That being the case, I would ask that the Deputy Prime Minister consider an amendment to the legislation to require that all valuation reports submitted to the Strata Titles Board include a declaration by the valuer as to its relationships, if any, with any of the majority owners or the marketing agent handling that transaction and, in particular, the amount of business that it has done with that marketing agent in the preceding 12 months.

     I also understand that the Senior Parliamentary Secretary, Ministry of the Environment and Water Resources, is the Chairperson of the Council of the SISV.  I hope that she can provide the appropriate feedback to the Institute for their consideration and action.

     If the SISV does issue well-thought-out guidelines, then a valuer would have to justify any deviation from or inconsistency with those guidelines.  This would then help the Strata Titles Board to better evaluate whether the transaction is in good faith in relation to the method of distribution of the sale proceeds.  This is the responsible approach and would do wonders for fairness and transparency in the collective sales process.

     Sir, I will now briefly touch on some other areas that I believe can be further refined.

     Firstly, the Amendment Bill introduces a new provision that permits the Strata Titles Board to grant a collective sale order, subject to a condition that the sale proceeds must be paid from the proceeds of sale of all subsidiary proprietors, seems to me inequitable in that it penalises minority owners who do not file an objection.  It essentially compels all minority owners to file an objection.  If the minority owner does not sign the CSA but also does not file an objection, then he suffers a double whammy. 

     Firstly, the Board is not empowered to increase his sale proceeds. 

     Secondly, his share of the sale proceeds will be reduced, since he will also have to contribute to the amounts paid to objectors.

     This seems unfair.  After all, the majority owners are the ones who are keen and enthusiastic to complete the sale.  So it only seems fair that they bear the cost of any additional payment to objectors.  This is especially when they have the choice of whether to agree to making such payment, through the requirement for the CSC's consent.

     Furthermore, the aggregate cap on the sum that the Board may order seems overly low.  Collective sales typically involve payouts to owners in millions.  0.25% of $1 million is only $2,500.  Any increase in the amount payable to objectors that is ordered by the Board will not be meaningful.  Given that the consent of the CSC is required, there seems no reason why the aggregate cap should be so low, since the CSC can always withhold its consent if it feels that the amount being ordered is too high.

     Secondly, the Amendment Bill goes a very long way towards resolving the ambiguities and uncertainties surrounding the selection of the CSC.  But some issues remain.

     For instance, the CSC is now a committee elected by the subsidiary proprietors at a general meeting of the management corporation.  But the amendment Bill does not set out the extent of control that general meetings can have over the CSC, such as the power to issue directions to the CSC.  The Bill also does not provide for the situation where all CSC members resign, as has happened with Horizon Towers.

     In addition, the Amendment Bill leaves the nature and duties of the CSC hazy.  Do CSC members have a duty to act in the best interests of all subsidiary proprietors, or only those who have signed the CSA?  Does a CSC member even have any duty to act in the best interest of anyone other than himself or herself? 

     And for whom do the solicitors and the marketing agents act?  To whom do they owe their contractual and fiduciary duties?  The CSC?  The management corporation?  All subsidiary proprietors?  Or only those owners who have signed the CSA?  This latter point is especially important with respect to solicitors, because it would then guide them in their discharge of their duties.  It seems from anecdotal evidence that some solicitors behave as if they are only acting for the CSC while other subsidiary proprietors believe that the solicitors are acting to protect their own best interests.  This is not a desirable state of affairs. 

     Sir, these issues are not addressed in the amendment Bill.  Perhaps they are governed by other areas of law, in which case, I would be grateful if the Deputy Prime Minister would clarify the position.

     Thirdly, the Amendment Bill specifies that a motion at a general meeting of a management corporation for the purposes of a collective sale shall be decided by the value of votes cast for and against that motion.  It goes on to explain that the value of a vote is equal to the share value.  That is in paragraph 10 of the proposed new Second Schedule.

     This may create a back-door through which owners of commercial units in mixed developments could oppress owners of residential units.  The Bill introduces an additional approval requirement, ie, 80% or 90% for developments younger than 10 years, of owners by floor areas.  This additional approval requirement is meant to address the common situation in mixed developments where commercial units have very high share values in comparison to residential units.

     But requiring motions at general meetings to be decided by votes based solely on share value may result in commercial owners controlling the CSC, to the exclusion of residential owners.  While residential owners are still entitled to withhold their approval from the sale, this seems very similar to the current situation where majority owners control the CSC and minority owners are not represented, which would lead to the very situations of animosity and unhappiness that this Bill seeks to avoid.

     Finally, the Strata Titles Board is a tribunal constituted under the Building Maintenance and Strata Management Act (BMSMA).  Under the BMSMA, decisions of the Board may be appealed to the High Court only on questions of law.  In other words, questions of fact cannot be appealed to the High Court.

     The Bill introduces a new rule permitting the Strata Titles Board to ignore procedural defects and errors in an application for a collective sales order where such defects and errors do not prejudice the interest of any person.  The question of whether the interest of any person has been prejudiced is a question of fact.  Under the proposed new rule, the Board's decision on that question of fact will not be subject to appeal.

     Considering that this decision of the Board could well be critical in determining whether a collective sale order is granted, I would suggest that it may be appropriate to reconsider the provisions of the BMSMA excluding appeals to the High Court on questions of fact. 

     Sir, the collective sale mechanism has been highly controversial in recent months.  It was introduced for the objective of ensuring urban rejuvenation by the private sector.  It obviates the need for compulsory acquisition by the Government of decaying estates.

     I think the jury is still out on whether collective sale is good for Singapore on the whole, given that it is essentially a balancing exercise between the need for urban rejuvenation, the economic use of land, and our interest as a society in preserving our physical and architectural heritage, our memories and our sense of rootedness.  Here, I would echo the comments of my parliamentary colleagues who have spoken before me about the importance of maintaining memories and a sense of community.  But I think we are past that, and that is not what we are debating today.

     Indeed, the figures released by the Deputy Prime Minister earlier this week suggest that the collective sale process has been meeting its objective of urban rejuvenation.  The average age of all developments which applied for collective sale from January 2005 to end-August 2007 was 25.9 years.  Having said that, this figure should be monitored on an ongoing basis, as any dip in this figure may indicate that the collective sale process is being used, not for urban renewal, but for the maximisation of economic value of estates, regardless of their condition.  Any such indication would merit further discussion on whether it is a healthy development and whether it is desirable for the en bloc process to be used for such purposes.

     Given that collective sales are here to stay in Singapore, it is incumbent on Parliament to ensure that we properly balance and protect the interests of competing groups of property owners.  This Bill is long overdue in how it implements a long-overdue regime to govern the procedural aspects of the process.

     Having said that, the Bill fails to address a central issue of apportionment of sale proceeds, as well as a few areas that I have discussed. Whether collective sales will continue to be dogged by the anger and unhappiness that have clouded so many in recent months bears monitoring.  If they do, then it is clear that this Bill has been insufficient, in which case I trust that the Ministry will revisit the statute and reconsider the need to address the issues I have discussed, in particular, that of apportionment.

   Sir, with that, I support the Bill.

     Mr Speaker: Order.  I propose to take the break now.  I suspend the Sitting and will take the Chair again at 3.20 pm.

Sitting accordingly suspended

at 2.55 pm until 3.20 pm.

Sitting resumed at 3.20 pm

[Mdm Deputy Speaker (Ms Indranee Rajah) in the Chair]

LAND TITLES (STRATA) (AMENDMENT) BILL

     Debate resumed.

     Prof. Jayakumar: Mdm Deputy Speaker, I wish to thank all the Members who have spoken on the Bill. Basically, they have expressed support for the Bill, but if I could generalise, many of them wanted more safeguards, more provisions and more controls.  I think this also reflected the feedback during the consultations. I would not dismiss the various suggestions that they have made as being without merit but, as I explained in my Second Reading speech, we have to craft the amendments in a way that strikes a balance between trying to make the process more transparent, fairer and with suitable safeguards while, at the same time, not making it unduly unmanageable or too onerous to bring about an en bloc sale.  Basically, the challenge is how to make these amendments or other amendments without micro-managing the process because, ultimately, we have to leave the substantive agreements to negotiations between the subsidiary proprietors in an en bloc development.

    But let me make this other general point. The fact that we are today about to enact these amendments does not mean that once they come into effect, the Ministry of Law will close shop and forget about the process of en bloc sales.  Let me assure the House that this review by my Ministry, the Strata Titles Board and the Singapore Land Authority will be an on-going one. So we will see how these amendments operate in practice and see how the new legal regime works. And if it is felt that further changes are needed, in the light of subsequent experience, then indeed where it merits further refinements and changes, we will do so.  At that stage, some of the changes and suggestions proposed by Members will also be taken into account. 

    From that general observation, I now turn to some of the specific points made by Members who spoke.  Dr Teo Ho Pin asked about the new additional consent requirement that we have introduced in this Bill and he asked how it can facilitate en bloc sales. I should explain that actually the aim of this amendment is really to have an additional safeguard and not so much, to use his word, "facilitate" en bloc sales.

Because the viability and timing of en bloc sale, we have to leave it to the owners in the estate and the market to determine.  This additional requirement was put into this Bill for the purpose of addressing a specific problem, and that is in terms of fairness in mixed developments where residential unit owners hold lesser share values despite owning a substantial floor area and a substantial number of units.  So this is to deal with a special problem in mixed developments.  As I said, we had originally proposed an additional consent requirement based on the number of units.  But after considering the feedback, we have decided to revise this additional requirement to that based on area of the lots.  And the reason is that the consent by number of units could result in owners of large commercial units sub-dividing their properties into many strata lots, so as to create additional lots, and that would actually defeat the intention of the process.

     Secondly, the consent by number of units means that the commercial units will have exactly the same voting rights as the residential units, notwithstanding that the commercial units may be many more times bigger in size.  That also would not be fair to owners with large units.

     Dr Teo Ho Pin also talked about the provision for STB to increase the sale proceeds for minority owners.  I think his point was that it was not clear what this limit was and perhaps a lump sum should be set aside.  Let me respond to that point by saying that clause 7(1) of the Bill makes it clear that the total sum ordered by the Board for all the objectives shall be paid from the proceeds of sale of all the subsidiary proprietors and shall not exceed the aggregate sum of 0.25% of the proceeds of sale or $2,000 for each lot, whichever is the higher.  So, what we have done is to provide for the formula to be based on percentage of sale proceeds.  I think it is difficult to go beyond that and to provide for a specific quantum, the actual amount, in the law to be set aside upfront before the sale proceeds have been settled.  It is a question of practicality and I think it is easier to set out the formula.

     Dr Teo Ho Pin also asked about the workload of the STB, whether it can delay collective sales and asked for  the number of panel members to be increased.  I think it is a good point.  But let me say that the workload, although it has increased, has not really impaired the process of the STB deciding on these cases and there have not been undue delays.  In fact, in a response to a parliamentary question earlier this week, my colleague, the Minister for National Development, said that a total of 60 en bloc applications were received by STB in the first eight months of this year.  STB concluded 32 of them within six months.  Only one exceptional case had to be extended, as an earlier date for hearing could not be scheduled as counsel for both applicants and respondents were involved in other matters.  So it is really matters beyond the control of the STB.

     Having said that, I agree with the Member that we could divide the heavy workload amongst more members of the Strata Titles Board.  The Bill, as the Member knows, allows for the Minister to appoint more Deputy Presidents and panel members to the STB.  So we will work with the Ministry of National Development to make these additional appointments once the amended Act comes into effect.

     Dr Teo Ho Pin also asked for clarification about non-contactable owners, whether they should be regarded as minority owners with valid objections and whether the STB should then be empowered to decide on them.  When an application is made to the STB by the majority owners who have agreed to the en bloc sale under a sale and purchase agreement, those who object to the sale must file an objection.  That is provided for because only then can the Strata Titles Board consider the grounds of objection.  There must be an objection.  If there is no objection, then the STB would not be able to consider whether, for example, they have incurred a financial loss or have other valid objections.  Therefore, those who did not sign the collective sale agreement (CSA) or cannot be contacted, the approach of the law is that they cannot be considered as having objected to the sale.  In other words, an objector is considered an objector only if he has filed an objection within the allowable period stipulated under the Act.

     The next point raised by Dr Teo Ho Pin was about providing a fixed duration where vacant possession is to be handed over to the purchaser of the collective sale.  I think it is very difficult, for practical purposes, for the law to provide such details, because it would really be micro managing the issue.  Because each development has its own requirements.  A later vacant possession date may mean a lower price from the buyer.  Also, each owner has his own timeline for vacating his unit.  The buyer may have his own project development timeline, depending on the market demand and the resources.  Therefore, the approach of the law is that it is better to leave it to the owners to negotiate with the buyer a deal that best meets their needs and interest.

     Dr Teo Ho Pin also asked about the application of the law, whether it is retrospective and so on.  As I mentioned in my speech, the proposed changes will not apply to developments where the required 80% or 90% majority of owners based on share value have signed the CSA as at the date of commencement of the Act.  I know that, in fact, some have come to my meet-the-people sessions to say that people are rushing to form collective sale committees.  The trigger is not the collective sale committee.  It is whether they have obtained the 80% or 90%.

     Mr Alvin Yeo asked several questions about the sale committee, scope of its duties, whether it has fiduciary duties, and Ms Irene Ng also asked about that.  Mr Siew Kum Hong likewise asked for the nature of the sale committee, the rights and duties, what kind of duty of care that they have to act and in whose interest.

     Mr Alvin Yeo, in elaborating the point, also referred to the Horizon Towers case.  He was careful to say that the Horizon Towers case is before the court.  But his plea was that, for future cases, we should spell out the issue of the rights and liabilities concerning the sale committee.  Since the matter is before the court, I think Members will understand that I would not be able to go into details.  Our policy intention in introducing these changes is to instill some order and transparency into the various processes.  That is the major intention.  So, to that end, we have structured the manner in which the sale committees are formed, how they may function, and so on.  It is not our intention, in these amendments, to change the substantive law regarding their potential duties or liability, whether under common law, or as Ms Irene Ng asked about lawyers, whether under the law governing advocates and solicitors.  It is not the intention of these provisions to change the substantive law concerning these matters.  Whatever the legal position is, it will remain the same.  So, as I said, in view of the Horizon Towers case, I do not think I should go into details about the law applicable to the sale committees.

     Mr Alvin Yeo asked whether the Bill should go the full way to list in the Fourth Schedule all the permitted deductions, in other words, instead of being inclusive, be exhaustive.  The specific point that he made was about CPF monies.  He said that there is no reason why CPF monies should not be counted as a financial loss.

     Madam, the list in the Fourth Schedule is based on what the STB currently considers as permitted deductions.  It is not meant to be exhaustive.  Over time, additional items could be added if the STB comes across other permitted deductions while dealing with future applications. 

     On the treatment of CPF monies, I think what Mr Alvin Yeo is, in fact, asking us to amend the law is to reverse the High Court's decision in the Waterfront case.  My Ministry has no ground to disagree with the ruling in that case, and hence we have not sought to amend the law.

     Perhaps, I should explain.  In a property purchase, CPF funds can be used to pay for three components: (1) the lump sum for the initial purchase; (2) monthly repayments of bank loan principal; and (3) monthly repayments of the bank loan interest.  I should explain that CPF funds used for the initial purchase  - this is the first component - and for monthly repayments of bank loan principal - this is the second component - are factored in financial loss computation as they constitute part of the original purchase price.  But CPF funds used to repay bank loan interest - this is the third component - are not taken into account, because if the law were to do that, then there would be no parity between an owner who takes a long-term mortgage with a high component of bank interest and an owner who pays totally in cash or an owner who takes a small loan and pays off the loan faster.

     Some have asked if CPF interest forgone for the total amount of CPF money that has been withdrawn should also be taken into consideration.  This component is not relevant because there is no actual financial loss in the CPF interest forgone.

     Mr Alvin Yeo then asked about the lawyer's role in explaining the terms and conditions.  The reason why we have put in this provision is that we have received feedback that owners do not know what is contained in the CSA.  Some have claimed that they have been pressed to sign the CSA under duress or misrepresentation.  So, in order to address these issues, we have provided for a lawyer to be present, and this offers the owners an opportunity to ask the lawyer to explain the legal terms and liabilities and address any doubts that they have.  But I think we should leave the precise questions that may be asked of the lawyer to the meeting and other opportunities they may have with the lawyer.  I think it would not be practical for the law to prescribe the precise items and details on which the lawyer will have to explain.

     Mr Alvin Yeo also asked, if I remember, about owners who are overseas.  My response to that is

we have to take a practical approach as it concerns owners who reside overseas.  After all, if an owner resides overseas and he knows that there is an on-going en bloc attempt to sell but still does not make the effort to come to Singapore, I think it would not be practical to require that the lawyer for the en bloc sale to fly out to wherever it is and meet each of its owners. It would also not be fair to the owners in Singapore for such arrangements to be made as additional costs will be borne by them.  Anyway, I think arrangements can always be made for those residing overseas to contact the lawyers by telephone or other means, or by email, if they have any questions to be clarified.

     Mr Alvin Yeo also asked about the mandate given to the collective sale committee, the marketing agent, and so on.  We have provided that the sale committee will terminate upon the termination or expiry of the CSC.  The reserve price is just an indicative value.  Depending on the market conditions, the actual value of a development could either go up or below the reserve price.  Rather than for the law to state how long the reserve price will be valid, the better approach that we have taken in the Bill is to require the sale committee to obtain a valuation report on the value of the en bloc sale as at the date of the close of the tender or auction on the same date.  For example, if the tender price is above the reserve price but below the latest valuation, the owners will have to decide whether to sell. 

     More than one Member asked about one-to-one replacement.  Ms Ellen Lee proposed that we provide for one-to-one exchange and, I think, she was particularly concerned about the elderly.  Ms Irene Ng also drew a comparison with SERS and asked if we could have one-to-one.  Of course, I should mention in parenthesis that SERS is acquisition under the Land Acquisition Act, and the system is very different.  On this one-to-one replacement or exchange, we have considered these proposals for one-to-one exchange as well as requiring the developers to offer a replacement unit which may not strictly be for one-to-one exchange. We also consulted the people in the industry and our expert panel.  While I fully understand the sentiments, I wish to point out that there are many practical difficulties.  For example, in a letter written and it was published in the local newspaper, one owner was offered a replacement unit but declined the offer, wrote to the press to say that the replacement unit, which eventually his neighbour took, had many nooks and crannies that were not usable, the rooms were all much smaller, the neighbouring unit was so close that he could open the windows and shake hands with the neighbour occupant.

     So, there will be various complaints.  To avoid such complaints that owners are short-changed, we will have to prescribe in the law that developers must provide owners with details such as the size, configuration and the price of the units at the time when the developers make a bid to purchase the development.  So, that is a major practical difficulty.  And that may delay the process as well as add to the cost which could, ultimately, translate into lower sale proceeds.  In the end, because of all these practical difficulties, we decided that the best is to leave it to the owners to negotiate with the developers for the best deal.  I think it is better just to provide for the en bloc sale through an open tender or auction so that the owners can get the best price, and they can then decide how best to use their sale proceeds.  If some of the developments, especially the smaller ones, can find a way to negotiate and offer for replacement, of course, they are free to do so.  I understand that, in fact, this happens on the ground.  Paterson Lodge was such a case.  And I was told that some developers have offered the owners who are selling the first preview to purchase a new flat ahead of the public launch.  But these are matters which we should leave it to them to negotiate.  I would not favour prescribing these because you have to prescribe for a great number of details.

     Ms Irene Ng asked how many reports Police has received about harassment and intimidation, and what was the most serious case.  I am afraid I do not have these statistics with me.  But let me emphasise that the new rules which we are going to enact such as requirement for general meetings be held, cooling-off period, requirement to sign before a lawyer, are all meant to address the issue of harassment and intimidation as well as scrutiny of the housing agents.

     Ms Irene Ng asked why estates below 10 years are allowed to go en bloc when they are not considered old buildings, whether it is environmentally unfriendly, and so on.  And this was echoed by Prof. Kalyani and Mr Siew Kum Hong.  I will go back to 1999 when we first enacted the amendments providing for en bloc sale, and we had a Select Committee then.  At that time when we drafted the first set of legislation, and we referred it to a Select Committee, we, in fact, received serious representations that we should not make any distinction between developments which were over or less than 10 years.  In other words, the same rule - 80% - should apply to all developments, regardless of the age.  We considered this but we thought that it was fair to require 90% for developments which were less than 10 years.  In other words, rather than impose an arbitrary limit, we better leave it to market forces to determine the viability and timing of en bloc sales. 

     Since 1999, almost 70% of developments that had undergone en bloc sales were more than 20 years old.  To date, there has only been one case of a development that was below 10 years, and that case was a development which originally had 44 units and was redeveloped to a development with 160 units.

     Mr Alvin Yeo and Prof. Kalyani Mehta raised questions concerning the disclosure of interest provision.  Let me deal with that now.  Mr Alvin Yeo actually wants us to go further than what we have provided.  What we have provided is fairly exhaustive, in my view: "A person standing for election ... who has any direct or indirect interest in any property developer, property consultant, marketing agent or legal firm, being an interest that could conflict with the proper performance of his functions as a member of the collective sale committee ..... shall, as soon as practicable after the relevant facts have come to his knowledge, disclose the nature of that interest at a general meeting."  Mr Alvin Yeo wants us to go further to cover situations where there is no conflict of interest but where the candidate should, for transparency, I guess, declare if he or his family has several units in that development, and so on.

       I am reluctant to go beyond providing for disclosure requirements to prevent conflict of interest situations as it will make it too onerous for members to volunteer their services for serving on the sale committee.  Let us have this conflict of interest provision and see how it works.  On the same provision, Prof. Kalyani Mehta was not happy with the phrase "as soon as practicable" because she thought it was open-ended, it can be declared any time.  What is important for me to stress is that it is not open-ended because every candidate must disclose this conflict of interest situation.  Although it says "as soon as practicable", it must be, at the latest, at a general meeting which is convened to elect members of the sale committee.  In that way, there is a finite period - it must be declared by the date of the general meeting.  So, all those attending the general meeting would be apprised of this potential conflict of interest situation. 

     What happens if there is intentional non-disclosure?  I think that will be quite serious and it will render the person, of course, liable to be removed by the owners at the general meeting.  Going back to our original policy purposes, the purpose of the Bill is to make things more transparent.  In other words, all candidates must disclose so that everybody knows.  It is not appropriate to create a new legal liability in that regard.

     Then Prof. Kalyani Mehta talked about "condo-raiders". Because of these creatures she described as "condo-raiders", she wants a minimum period of residence to be stipulated as a criterion for being elected into the collective sale committee, and she proposes two years.  In other words, you must be residing there for two years or more before you can be elected.  I am reluctant to do that.  Because if you prescribe in the law that you must have a period of two years, then it is an implication, is it not, that if you have purchased a property within one year, you are deemed to be a "condo-raider".  And there may be people who have genuinely, bona fide, purchased a property within one year, 15 months or 18 months, intending it to be a home.  And if they have done so, they may for good reasons want to serve in the sale committee to protect their interest and to protect the integrity of the process. So, I think it would create problems if we were to make that provision which will carry with it the implication and presumption that every purchaser who purchases a property within two years must have a certain taint or colouration about the intention.  I think it is best to let the owners assess the candidates according to their own criteria and elect into the sale committee who they think are fit and proper to represent their interest.

      Prof. Kalyani Mehta also asked whether we could have a special unit to look into complaints of stakeholders in en bloc negotiations in order to troubleshoot and deal with conflicts.  Of course, as with all Ministries, my Ministry already has in place a system to receive and consider feedback, complaints and suggestions on en bloc sales as well as other matters, and also to address the issues and respond to them when necessary.  This latest review of en bloc legislation is a case in point.  Because we have a unit to look into the feedback, this had led to a study which eventually was a genesis of these amendments.  But let me assure her that we will work with the Strata Titles Board and the people in the industry to see how the public and owners of strata title units can be better informed of the en bloc sale process, including the new requirements and rules.

     This leads me to several suggestions that have been made by Dr Teo Ho Pin, Ms Ellen Lee, Prof. Kalyani Mehta, Mr Alvin Yeo, concerning guidelines, best practices, code, model law, and so on.

Dr Teo Ho Pin asked that we consider a set of standard collective sale forms to facilitate compliance with the new requirements, such as the new requirements in the Second and Third Schedules.  I think Ms Ellen Lee also wanted us to develop a set of guidelines for best practices in collective sales in private properties.  Prof. Kalyani Mehta also asked for a code of best practices to be drawn up.  Mr Alvin Yeo proposed that the standard terms and conditions be set out in a standard form agreement for collective sale, in other words, standard CSA, if I am not mistaken.

     Let me deal with the points in turn concerning best practices and forms to facilitate compliance with new requirements. Basically, as the Members would know, the Bill sets out essential requirements that the sale committee would have to adhere to. Notwithstanding that, I agree with the suggestions to develop the best practices guide, forms and such aids to assist practitioners in their work.  So my Ministry will discuss with the Strata Titles Board and others, including the Law Society, to see how best we can do that.  In fact, STB already has some standard forms, such as application for collective sale order, and we will discuss with them how the new requirements could either be improved or we can add on to the existing forms or include new forms, where necessary. 

     On Mr Alvin Yeo's suggestion for standard CSA contract,  I agree with his objective of making clear to the owners what they would be signing.  But I do not necessarily agree that the objective can only be achieved by prescribing a standard contract.  I think the objective can also be achieved by requiring key information to be highlighted in the preface to the CSA and the requirement to sign before the lawyer responsible for the CSA, which we have done.

     Mr Siew Kum Hong expressed his unhappiness with the guidelines, especially the guidelines issued by SISV, on how proceeds should be apportioned or distributed.  I would look into this.  But let me say that we understand that the SISV is working on refining valuation guidelines which are often used when valuers are asked to determine apportionment in sale proceeds.  Of course, we are not able to specify in the law a standard apportionment method because there are a multitude of factors to consider in deciding on a single method of distributing the sale proceeds, including share value, size of unit, market value, and so on.  So it would be very difficult to specify one standard method that you could apply to all sizes, designs and types of developments.  But I take his point about the guidelines, and we will have discussions with the SISV.

     Mr Siew Kum Hong also asked about the provision permitting STB to order an increase in payment.  I think his view was that it is inequitable to order the increased payment to be paid by all subsidiary proprietors.  It is not inconsistent with the provisions in the existing law because just as all owners contribute towards the fees incurred for en bloc sale, it is not unfair for them to contribute towards an increase in the sale proceeds ordered by STB.  But this is why we have kept the maximum amount that an owner may potentially have to contribute as 0.25% of the sale proceeds, or $2,000, whichever is higher.  Individually, it may be a small amount - Mr Siew made the point that it is a small amount - but collectively, it will give the STB a fairly meaningful amount which it can use in cases where it is satisfied that it is inequitable to do so.

     Mr Siew Kum Hong also talked about having motions at the general meeting of the MC to decide on the basis of share values, and he thought it derogates from the benefits of the new requirement of the 80%/90% decision to have en bloc sales.  The additional requirement of the area is actually to address the specific problem of residential owners holding less share value, despite owning a substantial floor area when it comes to deciding whether to sell the development en bloc.  In dealing with that specific issue, we have decided that we should not alter the fundamental basis by which decisions are made at general meetings in a strata development.  Even if, as Mr Siew Kum Hong pointed out, commercial owners were to dominate at the general meeting, they will still need to comply with all the procedures and requirements which we have set out in the Schedules and hold the required meetings to keep all owners informed.

     Mr Siew Kum Hong also talked about appeals against STB's decisions.  At the moment, it is currently limited to questions of law.  I think he proposed whether it is time to consider removing that restriction.  When we first enacted the provisions on en bloc sales by majority consent, we had to address this issue.  We decided then that the Strata Titles Board, not the courts, would be the appropriate body to hear the application and objections as they would invariably be non-legal issues which lend themselves more to mediation rather than adjudication by the courts.  We think this is still the case.  As most objections relate to claims of financial loss or transactions not made in good faith, they are not really legal issues which lend themselves to adjudication by the courts.  Also, allowing appeals on non-legal points, I think, would lead to unnecessary delays in the whole en bloc process. 

     I think the final point raised by Mr Siew Kum Hong is whether the valuer should declare his interest, say, with the marketing agent.  Here, it is noted that our new provisions already provide that there must be an independent valuer, independent in the sense that he must not have an interest in the en bloc development.  In any case, the owners in the general meeting convened to appoint a marketing consultant and valuer can still require that they disclose this and other interest.

     Mdm Deputy Speaker, as I said in the beginning, I do not consider that all the suggestions made by Members, which are not reflected in the Bill, as being undeserving of consideration.  The position I take is that this is an ongoing process.  There will be more en bloc sales.  We have to see how this new legal regime works in practice.  My Ministry, together with the other agencies, will monitor very closely the operation of these new provisions.  It is my hope that they will eradicate or, if not, significantly minimise complaints of harassment, unfairness and lack of transparency.  But if it is necessary to make further amendments, then we have no hesitation to do so.

     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. - [Prof. S Jayakumar].

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

which covers the "control of building works".  We have reorganised it into seven divisions to cover the following changes.

Regulating of underground building works

     First, the Bill will require formal and more stringent regulation of major underground building works as these works have significant safety impact.  In particular, temporary earth-retaining structures (TERS) will be treated like permanent works.  TERS are structures used in excavations to support the earth while permanent structures are being constructed.  These are the structures that failed in the Nicoll Highway incident.  Currently, unlike permanent works, TERS are only regulated through conditions imposed in the permit to commence structural works.

     The design and construction of TERS can be very complex due to variable ground conditions and the density of our built-up area.  They deserve greater attention and scrutiny in the building regulatory process.  The Bill will subject the design and construction of TERS to greater rigour of control.  The design of TERS will need to be done by a Professional Engineer (PE) and reviewed by an Accredited Checker (AC).  A PE will also be required to supervise its construction.  In addition, PEs and ACs who are specialists in geotechnical engineering must prepare the geotechnical aspects of TERS in deep excavation works, which are defined as excavation going deeper than six metres.

     The requirement for inputs by geotechnical specialists will also apply to other major geotechnical works, such as tunnels greater than two metres in diameter, underground structures deeper than six metres, and complex foundations of tall buildings.  Like TERS in deep excavations, these works involve great complexity in geotechnical engineering and have considerable safety impact.

Duties and independence of project parties

     The Bill has also reviewed the roles and responsibilities of various key stakeholders involved in construction projects, given that they play a critical part in ensuring safety at various stages of construction.  Division 4 of Part II spells out the duties of the developers, Qualified Persons (QPs), site supervisors and builders as well as the requirements to enhance the independence among the various project parties.

Provision of adequate site supervision 

     Currently, the QP is obliged to appoint at least one qualified site supervisor, regardless of the size or complexity of a development, whilst the builder is not required to do so.  The amendment will require both the QPs and builders to provide adequate site supervision to ensure that building works are carried out properly and safely.

     The minimum composition of the QP's supervision team will vary according to the value of the project, which is correlated to the scale and complexity of the project.  In addition, site supervisors will have to be accredited by BCA or a specified professional body.  Site supervisors will need to go for continuous vocational training, to ensure that they remain competent and keep abreast of new technical requirements and skills.

Independence of project parties

     Madam, the Committee of Inquiry (COI) for the Nicoll Highway incident had highlighted that the relationships between some project parties could potentially give rise to conflict of interests.  The Bill will address this concern.  It will specify the circumstances under which certain project parties should not be associated with one another.

     Firstly, for major construction works, the Bill will require that the QP who supervises the structural works and his supervision team shall not be associated with the developer. 

     Secondly, the instrumentation specialist shall not be associated with the builder and will have to be appointed by the developer. 

     Lastly, the existing provisions requiring the AC to be independent of the builder will be extended to the geotechnical specialist AC.

     I would like to stress that these provisions are not meant to replace the ethical codes of the various professional boards.  They are meant to prevent situations where the professionals are placed in a position of conflict of interests, as this could lead to construction safety being compromised.

New Part VA on licensing of builders

     Sir, the builders are key players in ensuring construction and building safety.  Clause 9 of the Bill has added a new Part VA to put in place a licensing scheme to set minimum standards of professionalism for builders.  We will license general builders and specialist builders engaged in six categories of specialist building works.  To be licensed, firms must be financially sound and have good safety records as well. They must also appoint key personnel with suitable qualifications and experience to be responsible for managing the firm and supervising the execution of construction works. 

     The proposed licensing scheme will ensure that our builders are professionally qualified and competent.  It will also spur firms to upgrade themselves and, as a result of that, raise the overall competency of the industry. 

     There will be two classes of licence for the general builders.  A licensed Class 1 general builder will be allowed to participate in all projects, while a licensed Class 2 general builder is restricted to projects of value not more than $3 million.   

     For specialist builders, there will be different types of licence, each authorising a specific area of specialist building works to be carried out as a business.  These include specialist works in piling, ground support and stabilisation, site investigation, structural steel, pre-cast concrete and on-site post-tensioning. 
The intention is to ensure that only competent licensees are allowed to execute these specialist works, given the inherently high risks associated with such works.  A general builder's licence or a specialist builder's licence will be valid for up to three years and is renewable.

Conditions on construction personnel

      Madam, consistent with the objective to produce professional builders, we aim to develop a progressive workforce that is anchored by a stable core of skilled construction personnel.  As a licensing condition, Class 1 general builders will be required to deploy a minimum number and composition of registered Trade Foremen and Tradesmen in selective key construction trades for projects of value $10 million or more.  The detailed requirements will be prescribed in the Regulations.

Revocation of licence

     The Bill also sets out the circumstances under which the Commissioner of Building Control can revoke a builder's licence.  The Commissioner must however give the builder an opportunity to be heard before revoking the licence.  The Bill will also allow the Commissioner to consider less severe actions, such as a suspension or a fine, in place of revocation.  In addition, there will be a provision for appeal to the Minister.  To prepare the industry, a six-month grace period will be granted for general builders and specialist builders to apply for a licence after the relevant part of this Bill comes into force.

Revised penalties for non-compliance

     The COI for the Nicoll Highway incident had also commented that "Accidents can be prevented through higher penalties for poor safety management".

     In moving the Workplace Safety and Health Bill last year, the Minister for Manpower has asserted the need to ensure that penalties for non-compliance are set at a high enough level to reflect the true cost of poor safety management.  This Bill will align the penalties for offences under the Building Control Act with those for offences of similar severity under the Workplace Safety and Health Act (WSHA).

     The Bill also introduces an amendment concerning continuing offences.  It makes clear that where it is an offence if any act or thing is not done by a particular time, the obligation to do so will continue, even after the stipulated time has passed.  In this regard, the person shall be guilty of a separate offence for each day that he continues to refuse or fail to do that act or thing after the stipulated time.

Standards on environmental sustainability

     Madam, I shall now move on to the relevant sections of the Bill which support our emphasis on sustainable development.  Clause 15 of the Bill will empower the Minister to make regulations on minimum standards of environmental sustainability for new buildings and existing buildings undergoing major retrofitting works.  While a green building is likely to involve higher development cost, on a life-cycle basis, the savings gained from operating a green building will more than offset the higher upfront cost.  With widespread adoption of green building technologies, the upfront cost will also decline.  With the new provisions, we hope to see more environmentally-friendly buildings with greater energy and water efficiency, and constructed using sustainable methods and materials.

     The recent disruptions of sand and granite supplies from Indonesia are useful reminders of the need to embrace sustainable construction.  Sustainable construction involves the use of materials that are recyclable, reusable and readily available from many sources.  It will help to reduce our reliance on concrete and, hence, materials like sand and granite.

New Part IIIA on continued compliance with performance requirements

     Presently, there are cases where provisions for disability access in completed buildings are being frustrated by irresponsible owners or occupiers.  To address this problem, we have added a new Part IIIA to require building owners or occupiers to ensure that physical features provided to facilitate mobility are not altered, removed or obstructed.  This is necessary to meet the needs of our rapidly ageing population and to make Singapore an inclusive society.

     The Bill will also have provisions to deal with similar problems where other performance requirements in a completed building are subsequently negated in the course of occupation and use.

Other amendments

     Madam, we have also taken the opportunity to make other amendments to improve some of the existing provisions in the Act.  I will now highlight the more important ones.

Dangerous buildings and occurrences

     Firstly, there is a new provision in Part IV to allow the Commissioner to order an inspection of any building in close proximity with dangerous building works.  The current law only limits the order for inspection to the adjacent buildings.  In addition, the Commissioner is empowered to issue an occupancy order to direct the owner or occupier of the dangerous building to restrict the number of people allowed in the building at any time or until the Commissioner is satisfied that any inspection or remedial works that he ordered are completed.

Disciplinary procedures governing ACs

     We are also strengthening the disciplinary procedures governing the ACs.  The Bill allows the Commissioner to appoint a lawyer to help him in an inquiry against any AC, specialist geotechnical AC or AC Organisation, and to recover the costs and expenses incurred in conducting such an inquiry, up to a maximum of $10,000, from the ACs or AC Organisation.  This is similar to the provisions for disciplinary inquiries in the Professional Engineers Act and the Architects Act.

Notification of any contravention

     Currently, the Act imposes a duty on the QP and builder to notify the Commissioner of Building Control of any contravention of the Act or Regulations relating to their project that they know or ought reasonably to know.  This duty will be extended to the developer, who is also a key party to the project.

Conclusion

     Mdm Deputy Speaker, building safety cannot be left to chance, and complacency has no place in any construction project.  Utmost attention must be paid to enhance the professionalism and safety standards of the industry.  

     In amending the Building Control Act, we are mindful that the measures to be introduced must be practical and not add undue regulatory burden and cost.  BCA has also consulted the industry widely on the proposed measures in this Bill.  There was general agreement that these measures would help to enhance safety standards and that the cost increase would not be significant.  I also want to make the point that the cost of not taking active measures to uplift the safety and professional standards in the construction industry is potentially much higher. 

     This Bill will put in place an enhanced building control framework to help industry stakeholders move towards higher standards in safety, quality and professionalism.  

     Madam, I beg to move.

     Question proposed.

4.27 pm

     Er Lee Bee Wah (Ang Mo Kio): Mdm Deputy Speaker, to begin with, I will declare my interest as a passionate practising Professional Engineer.  In the last few days, some of you asked me what is this "Er" that is being added to my name. "Er" actually stands for Professional Engineer, not because I have a new husband.

     Singapore's amazing journey from a Third World country to a developed nation in a short period of 42 years is a miracle to many. Without natural resources, its success can be attributed to the skills, dedication and commitment of our local engineers.  They have made it possible to house the entire nation, to have a dynamic CBD skyline, a seamless road network, efficient airport and seaport, to name a few, making Singapore one of the greatest cities in the world to live in. Our local engineers are the enablers and providers of infrastructure, which is the basic drive for economic growth.

     The construction industry has been put in the spotlight in recent times, and all for the right reasons. When I say this, I am referring to the number of new construction contracts being awarded - and that means jobs for construction companies as well as related professional companies in industries such as architecture and engineering.  Building construction is constantly evolving as well, and buildings are soaring to new heights.  This factor, combined with the increased complexity in modern designs, demands more from professionals involved in their planning, design as well as construction.

Being a professional

    Before I go any further, I think that it would be appropriate that I give a quick summary of defining the characteristics of a professional. Professionals are people who have to undergo specialised learning and training with some depth in their field.  They have acquired knowledge which has been accumulated over the years of their working life.  As professionals, they are required to maintain a high standard in the execution of their responsibilities because the lives, welfare and well-being of others depend on it.  The professional is thus expected to make sound and reasonable judgments in matters of importance, and on issues of uncertainty.

     Professionals thus have an obligation to serve the community with the high standards expected of them, and they are expected to fulfil their responsibilities by working out solutions that place the interests of the community above all else, including their own.  Accordingly, in order to perform their roles effectively, these professionals must be able to examine all their options without any external influence or pressure.  As such, their clients - be it an individual, a community or an entire society - will have to place some trust in their judgments and conduct.

High standards

     I entirely agree that a high standard of work must be maintained by professionals involved in the construction industry.  I recognise that a great many lives are at stake if any degree of negligence or incompetence is allowed to slip into the construction process.  I welcome the proposed changes that will improve construction safety. However, changes have to be measured as more rules and regulations may not always solve all problems.  If you ask any developer, architect, engineer or builder, you will hear the loud sigh at the multiple approvals that a plan has to obtain before it is given the final stamp of approval by the authorities, which include the Building and Construction Authority, among others.  Some are more high-handed than others.

    The Professional Engineer is given the task of  "gatekeeping".  It is an onerous responsibility which, over the years, judging by the number of building projects that have sprung up in Singapore, has had a good track record.  What this means is that we need good people - and by good, I mean more than just the moral character, but also people who have the intellect - to be drawn to the profession.

     Hence, from the picture painted, you can see that not anybody can be a Professional Engineer. With regard to the backdrop that I have painted earlier, in order to get people who can attain that level of learning, who can make sound judgments, especially in times of uncertainty, who can put the interests of others before self, you need to attract people that not only possess scholastic aptitude, but also with the moral character.

The engineering profession

     I have, on previous occasions, brought up in this House the issue of unattractive compensation that is received by Professional Engineers, in comparison with other professions.  Surprisingly or not, more than 40% of our Ministers and top civil servants are either trained as engineers or hold an engineering degree, and I can tell you that there are many more residing in the top hierarchy of the corporate world.  Indeed, these figures will appeal to those who are thinking of enrolling into engineering courses.  However, the compensation for those who choose to stay as professional engineers pales in comparison to the earnings of the top echelons in the public and private sectors.  Nonetheless, a core group has chosen to stay on and practise, and this bodes well for our country.  Today, engineers have a significant contribution to make in our nation building.  The many engineering feats that they have accomplished - from underground train tunnels to flyovers, high-rise buildings and NEWater - are testimony of their professional skills.  However, the torch must be passed on from one generation to another.  

     There must be a continual flow of good people willing to come into this profession, just like we need good people to enter politics and serve the nation. We need engineers in many industries, not just the construction industry.

     How do we attract good people?  Job satisfaction, remuneration, recognition and a congenial working environment are among a few that I can think of. Today, before this House stands a motion to amend the law that will increase the penalties for Professional Engineers if they are in default.  The proposed amendment seeks to double the fines and jail term.  With the strengthening of the regulatory framework, it is expected that professionalism, quality and safety in construction will be raised.  In my opinion, it is therefore not  necessary to also increase the penalties for offences under the Act.  Many are already having concern working  in the construction industry.  We should not overdo things that could result in brain-drain of talented individuals from the construction industry.

     As it stands, there are already sufficient disincentives to deter the best brains from applying to join the profession.  A few years ago, I asked one of my staff.  He has been with me for many years.  I said, "Why don't you go and apply for Professional Engineer?" Straightaway, he resigned.  He said, "I do not want to be subject to undue pressure."  So enhancing jail terms as a penalty will send a wrong and negative signal to those who may harbour any ambitions to be an engineer and, in so doing, would undoubtedly make them ask a few pertinent searching questions: shall I study engineering?  What if I ended up working in the construction industry?  Why do I want to subject myself to such severe penalties? 

     Why is there a need for the penalties to be increased if indeed, the profession is doing well and held in high esteem?

    Madam, may I ask Minister, in the last five years, how many Professional Engineers were sent to jail under the Building Control Act?  Is there a need to raise the penalties?  I would like to ask the Minister what would be the consequence or setback if the penalty is not aligned with those in the Workplace Safety and Health Act 2006?  Will our Professional Engineers be less professional?  Will our buildings be less safe?  I tend to believe that  the answer in the prevention of any lapses in the line of work of a professional lies not in raising penalties.  

     Rather, we should raise the level of education, thereby enhancing knowledge and improving the manner in which they go about their responsibilities, the Code of Ethics, for example.  I therefore ask the Minister not to revise upwards the current penalties spelt out in the existing Act.  In fact, we should abolish the jail term totally.

    The next point I like to speak on is the role of Professional Engineers as the "gatekeeper" for the Building and Construction Authority, who has the last say in the entire construction industry.  The current law imposes penalties on Professional Engineers, but the same is inapplicable to Government officers who approve construction projects.  Why should these officers be tempered with a "light touch" while the Professional Engineers face the prospect of getting the book thrown in their face?  Why should they be treated differently?  I am not advocating punishment for Government officers, but I just want Members to understand the feeling and low morale of the Professional Engineers.

     Next, I would like to raise the issue of Professional Engineers (Geotechnical) which has been proposed for design of foundations of structures of heights that are 30 storeys and above.  In fact, after the collapse of the Nicoll Highway, many of my friends in the construction industry had expected the Government to introduce more measures to strengthen safety at construction sites, as usual, they say, the typical knee-jerk reaction.  In fact, they dare me to bet with them.  To them, some changes are not necessary.

     One such example is the new requirement of introducing Professional Engineers (Geotechnical) for prescribed foundation on works for buildings more than 30 storeys.  What do you mean by "prescribed foundation work"?  If you talk about cassion, raft foundation, fine.  We do not do this very often. And when we do this, anyway, we will always seek opinions of Geotechnical engineers.  But certainly, not for piling works, such as bored pile or percussion piles which are used practically in every project, and we have been doing projects of 30 storeys and above for so many years.

All along, the  foundations of high-rise buildings have been designed by professional civil engineers, and only when they consider it necessary would they engage a  geotechnical engineer to assist.

     With this new amendment, whether there is a need or not, the developer must employ a  geotechnical engineer.  It is not only a waste of money - we may think that it is only a small fraction  - but it is also a waste of precious time. When there are two professional engineers involved in the design of an element, the accountability can never be clear.  As a practising engineer, I can tell you that this is not practical and unnecessary.         

     We may be aware that most of the problems are at the temporary works construction, not the permanent works design.  Are we addressing the root cause of the problem?  Can the Minister please give specific examples of problems with tall buildings in the past that could be avoided if we had the services of Professional Engineers (Geotechnical)? 

     Next, I think the amendment to the Building Control Act on licensing of builders would affect the operation of smaller construction companies. There is concern that many local construction companies will only be eligible for a Class 2 licence, which is for works up to the contract value of $3 million.  Medium-sized projects, eg, bungalow upgrading works,  nowadays easily cost more than $3 million.  It would take some time for such local companies to change their business structure to qualify for the next Class 1 licence.  My recommendation is either to introduce another intermediate category or  increase  the contract value to $10 million for a Class 2 licence.

     Lastly, I agree that it is ideal to develop a core skilled and experienced workforce.  While the details of the scheme are being worked out, I would like to urge the Ministry to consider both traditional source and non-traditional source workers who have worked in Singapore for a period of time to be considered as localised workers in the computation formula, as it is extremely difficult to get Singaporeans to work in construction sites.

     I would like to conclude, by the stroke of the pen, that we are going to affect the decision of many bright Junior College students.  And by raising our hand high, we are going to affect the way high-rise buildings are designed and the livelihood of many existing Professional Engineers.

     Mdm Deputy Speaker, I support the Bill, but I certainly hope that the Minister will consider my suggestions and concerns.

4.45 pm

     Dr Muhammad Faishal Ibrahim (Marine Parade): Mdm Deputy Speaker, I welcome the move to enhance safety, quality and professionalism in the construction industry through the Building Control (Amendment) Bill.

     The Amendment Bill is timely, given the resurgence in the construction industry, as Singapore develops and redevelops its urban landscape in the 21st century.  The Bill would ensure that Singapore retains the confidence of its safety standards and enhances the credibility of its construction industry, both locally and internationally.  What is most important is that the essence of the Bill aligns itself to the notion that every individual counts and safety standards should never be compromised.

     However, I would like to comment and propose the following suggestion.  With reference to the amendment in the area of temporary earth retaining structures, I agree that temporary works should be given the same respect and regulatory standard as permanent works.  Further to this issue, I would like to propose that both the above and underground temporary structure works to be put under one umbrella.  I understand that, currently, each of this type of temporary structure works is under the purview of two Government organisations, namely, the Building and Construction Authority and the Ministry of Manpower.  This merger, I believe, would provide the synergy for a holistic approach to regulating the two types of works.  In turn, safety of both areas would also be managed more efficiently and would certainly result in the optimisation of our scarce resources.

     With reference to the Amendment Bill in the area on deep excavation, I welcome the move for more geotechnical specialist's inputs in the construction process.  However, I would like to know if there are many in the field who are Singaporeans.  Should there be a need to develop this field of expertise more in Singapore, given the potential of this industry?  What would be the role of local institutes of higher learning and other educational and professional institutions in supporting this approach?  On this issue, I have received numerous feedback from construction professionals who say that there is an inadequacy with regard to geotechnical specialists.  As such, the cost of engaging their services has increased substantially.  I would like to ask the Minister how would the Ministry be addressing this issue.

     With regard to the amendment on the licensing of builders, I would like the Government to explore more options to attract more Singaporeans to the construction industry.  There is also greater investment needed in the development of the image of the construction industry to attract more people to the industry.  I would like to compare our recruitment approach to the analogy of "Bob, the builder", a popular icon among young children.  The profession should not be portrayed as someone just working as an ordinary labourer in the construction industry.  It should portray a creative, dynamic, talented and individual creator of things, just like "Bob, the builder", who propounds the value of teamwork, problem- solving and achieving something by working together.  This is also very much the essence of our education system.  For this to succeed, it will require the support of the educational and professional institutions to play and support the development of the image of the profession further.

     Mdm Deputy Speaker, Er Lee Bee Wah, MP for Ang Mo Kio GRC, earlier questioned about the move to revise upwards the current penalties, and she has highlighted her concern on its impact on attracting Singaporeans to join the engineering profession.  I urge the Minister to consider providing a good balance in enhancing safety while, at the same time, not deterring Singaporeans from joining the construction industry.

    Madam, on that note, I support the amendments to the Bill.

4.55 pm

     Ms Eunice Elizabeth Olsen (Nominated Member): Mdm Deputy Speaker, thank you for allowing me to speak on the Bill.

     It is not often that I speak on Bills but I cannot help but do so in this instance.  This is not a prelude to sharp criticism on the Bill and I shall save that for another day.  But rather, I am heartened that this legislation has not forgotten to include all members of society, in this instance, the disabled.

     Madam, I am referring to the new Part IIIA that is to be inserted, which refers to the disability and other performance requirements for buildings.  It may just be one part of the Bill but it is as significant as any of the amendments being proposed, the reason being that it signifies the importance of legislation to bring about socially desirable outcomes.  The efforts to change mindsets can only be strengthened by the muscle of legislation.

     The three new sections in Part IIIA ensure continued compliance with disability and other certain performance requirements for buildings.  In good old Singaporean style, we never rest on our laurels and are constantly striving to improve on our achievements.  So, adhering to this spirit of constantly wanting to be better, I would like to get greater clarity on the processes by which the Act is implemented.

     Firstly,  how will the Commissioner of Building Control ensure that the owner or occupier of a building does not alter, remove or obstruct any physical feature of the building that is in compliance with the building performance requirements, as stated in clause 22(e)?  How often will these checks be carried out, and will there be an annual report to capture the state of compliance?  And how will the Building and Control Authority educate the occupants about adhering to this Act?

     Madam, I feel that the fines set out in the Bill seem to be token fines and amounts to a slap on the wrist for errant occupants.  Is it an appropriate amount to show that the Government means business?  Lastly, is there a requirement for older existing buildings to meet current accessibility standards under the building regulations?

     Madam, all these are issues that need to be clarified for both the public, building owners and occupiers to be aware of.  I think that we are making progress here and look forward to more legislation that is inclusive and will slowly carve out the enlightened society we aspire to be.

     Mdm Deputy Speaker, this is definitely one Bill that I rise in support of.

     Ms Grace Fu Hai Yien: Mdm Deputy Speaker, I must, first, thank Members for speaking on this Bill.  We have had very passionate speeches from Er Lee Bee Wah, Dr Faishal and Ms Olsen.  All of them were in support of the essence of the Bill that we are discussing today.  It is really for Singapore to progress and to maintain our reputation as a city with good first-class infrastructure.  We need to improve the regulatory framework with a view to improve the safety standards of the construction industry.

     I would like to take specific comments given by the Members.  First, on the point of building works requirements, Er Lee asked whether it is necessary to require a geotechnical specialist to design the geotechnical aspects of the foundations of buildings which are 30 storeys and above.  What we are talking about is really buildings that are 30 storeys and above, and these high-rise buildings do have very demanding requirements on the piling and the foundations.  They can be very complex and therefore, what we are saying in this Bill is that only the geotechnical aspects of it are to be designed by Professional Engineers and checked by Accredited Checkers, both of which are to be registered as geotechnical engineers; in other words, Professional Engineer (Geotechnical) and Accredited Checker (Geotechnical).

    Any structural problems with the foundation of such high-rise buildings actually will have very serious consequences, especially so in Singapore when we are so densely populated and quite built-up as well, and we have certain lessons to be learnt in the past.  One such lesson was an incident involving a high-rise building at Church Street.  If Members can recall, it started to tilt when the foundations were found later to be faulty.  And the types of foundations used in these high-rise buildings could be complex.  Currently, although the design can be done by Professional Engineers (Civil), as Er Lee herself has said, in circumstances where the foundations are complex, Professional Engineers (Civil) do seek out specialist's inputs on geotechnical elements.  So I am sure that by formalising this requirement and doing so judiciously for a very limited number of buildings, we believe that between the Professional Engineer (Civil) and the Professional Engineer (Geotechnical), they will come up with some amicable working relationship, because this relationship already exists at the present day.  So what we are doing here is really to formalise the requirement of Professional Engineer (Geotechnical) and Accredited Checker (Geotechnical) for the complex piling requirements.  And what is considered as complex, I think Er Lee has mentioned a series or types of foundations which I have no intention of engaging her on.  Basically, it would be something that we will be discussing with the industry and formalising in the regulations.  The BCA will be writing a subsidiary legislation and that is something that we will discuss with the industry.  In fact, we have done quite a bit of industry and public consultation, and many of the feedback have been taken into consideration.

     Dr Faishal has also asked whether there are sufficient geotechnical specialists

to meet the new legislative requirements.  BCA's assessment is yes.  The Professional Engineers Board has actually commenced registration for specialist geotechnical PEs since last year.  And now we have more than 50 registered PE (Geotechnical), of whom two-thirds are Singaporeans, and we expect more to be registered in the coming months.  We hope that the cost of PE (Geotechnical), even though it has risen, as Dr Faishal has said, before the legislation, will be tempered with more PE (Geotechnical) being registered in the coming months.

     Our local university can definitely play a part in developing more expertise in this field by conducting post-graduate Master's courses.  And I would like to assure the House that we are definitely very mindful of the need to balance safety on one hand and not adding on additional or undue regulatory burden. I think the fact that we have Er Lee who called for lesser penalties and removal of custodial sentences and, on the other hand, Ms Olsen was asking for greater penalties to be added, shows the kind of delicate balance that we have to take in balancing the needs, both of ensuring safety which we are doing for the safety of the public and also not adding additional undue cost or inefficiency to the system.  And to show what we mean by that, the building of 30 storeys high, the cut-off that we adopted will actually make up less than 1% of the total number of new buildings constructed last year.  So, you can see that we do not set a benchmark that is too difficult for the industry to meet.  We also noted that similar practices have been adopted in overseas jurisdiction.  In Hong Kong, geotechnical inputs from a registered geotechnical engineer are required for building foundations of all buildings, regardless of storeys and height. 

     BCA will basically calibrate the requirements in the legislation.  As Er Lee has pointed out, there are different types of foundations and, therefore, I think that the detailed requirements will be documented in the regulations and will be finalised with the industry inputs.

     Er Lee expressed concerns over the approval process faced by the industry professionals. She lamented that she has met problems in the approval process and that probably some agencies have been high-handed, more so than the rest.  But what we would like to say here is that a building project is really a very complex one and, therefore, the approval process involves various agencies.  To assist the industry, we try to streamline the process taken, and we have put in place an electronic submission system and we hope that through an online submission method, we can reduce the need for repeated documentation, and so forth.  But we are open to suggestions and we definitely want to see improvement in this area.  So, if Er Lee could provide us with specific cases or processes where improvements can be made, we will be very happy to attend to them.

     On the regulation of temporary works or TERS, Dr Faishal has asked whether the regulation of all temporary works could come under one agency, be held under one umbrella, which is what the work is being done between MOM and MND. Let me explain how this demarcation came about.

     Traditionally, temporary works, both above and below ground, are considered as construction methods used by the builder to facilitate the construction of permanent structures.  They are not defined as building works and, therefore, they are not regulated under the Building Control Act.  So, these works have been regulated under the legislation on worksite safety.  However, following the Nicoll Highway incident, we recognise the need to treat TERS which are used to support ground excavation as a special category because TERS can have a very high safety impact, not only within the worksite, but on properties around it.  The Bill will thus treat TERS like permanent works and subject TERS to formal regulation under the Building Control Act. The other types of temporary works, such as scaffoldings, ladders, temporary floors and so on, will continue to be administered by MOM because they are more workplace safety related. 

     On licensing of builders, Er Lee has expressed concern that the new requirements will adversely affect the smaller contractors.  She specifically asked to allow Class 2 companies to be allowed to undertake contracts of $10 million, instead of $3 million, or that we set up an intermediary category.  Our response is this.  When we set up this regulatory framework, we actually benchmark the classes with the ability of the builders and the contractors.  In other words, if we say that a builder with a paid-up capital of $25,000 is able to undertake a project of $3 million, that has been calibrated in terms of their ability as well as the risk they are prepared to take.  If we were to raise that limit to $10 million, it means two things.  It means that either we have lost the objective of these licensing requirements or we may have to increase the hurdles for companies to qualify at the $10 million mark, which, in a way, may reduce the number of companies that is able to be licensed as well. 

     In this process of deciding what is the correct level, we have decided to choose a framework that is simple.  Basically, it just has two categories: general builders or specialist builders.  Within the general builders, there are two sub-categories: Class 1 and Class 2.  For a start, we think that it is best to go for a simple framework and not to make it too complex.  As I have said, for a Class 2 builder, looking at the financial requirements, we are talking about a firm with a paid-up capital of $25,000 being able to undertake a contract of $3 million.  We think that it is a very reasonable amount.  To have this company at $25,000 paid-up capital undertake a $10 million contract, I think we have lost the objective in the licensing.

     I would like to thank Ms Oslen for her support for Part IIIA.  On the question about how we intend to ensure continued compliance, BCA's view is that it is most practical for us basically to work on feedback from the public, given that the number of buildings in Singapore is just too many.  So we do not intend to work on a regular inspection but we hope that the public will help us in this enforcement area, and tell us if they felt that certain buildings or occupiers have basically been deprived of the use of the facilities that they were intended to. 

     Whether the prescribed penalties are sufficient, our comment is that besides a $5,000 fine, we are talking about a possible jail term of up to three months. And I think that is sufficient deterrence for an offence under this provision.

     On the issue of penalties, Er Lee has made a very passionate plea on this subject.  She asked whether it is necessary to increase the penalties or even have custodial sentences at all, for offences under the Building Control Act.  I think the purpose of revising the penalties here is just to ensure that the severity and the offences commensurate with one another, and that the penalties serve as an effective deterrence.  Custodial sentence is common for serious offences that could cause death or injury.  We have also found custodial sentences imposed on professionals under the Building Control laws in other developed countries.  For example, the Building Control Ordinance in Hong Kong, the California Building Standards Code and the New York City Building Code have provisions for custodial sentence for serious offences committed by professional practitioners.  In Singapore, custodial sentences may also be meted out for offences committed by other professionals.  So it is not just an issue that is faced by professional engineers.  Other professionals also have similar custodial sentences provided in their relevant legislation, such as the medical profession under the Infectious Diseases Act.

     Are higher penalties and custodial provisions effective deterrence?  We believe so.  Will higher penalties and custodial provisions dissuade people of high moral character - those characters that Er Lee has so convincingly described?  Do we think that because we have high deterrent sentences, we will dissuade them to practise in their profession?  We do not think so.  In fact, as we see that the professionals are able to weed out the black sheep in their profession, that would increase the confidence that the society has on the profession and the trust that Er Lee has so passionately pleaded for. I would like to use an example of drink driving. We have very severe penalties for drink driving.  But does that stop people from driving?  I do not think so.  People who are responsible on the road will continue to drive and they will discard their irresponsible act of driving after drinking.  I think this is an example of what we believe in having deterrence or high penalties in our provisions.  We have no intention of putting professional engineers in the jail just for the sake of doing it.  It just serves as deterrence.  To answer Er Lee's question about how many professional engineers have been sentenced to jail, I am very happy to say that none has been sentenced to jail.  But does it mean that because there are none, that we should remove the custodial sentences?  We do not think so.  Because we believe that it is important to have deterrents put in place in our provisions that commensurate with the severity of the offences.

     As a respectable profession, we do not think that professional engineers will ask themselves to be treated differently from a manager at the worksite.  By putting the sentence or the punishment at the same level as the Workplace Safety and Health Act, we think that it is a very fair and equitable treatment.

     In fact, a broader question is: how do we raise the image of industry and how do we attract more Singaporeans to join the industry?  I am definitely supportive of Er Lee and Dr Faishal's call that we must make the industry an attractive one for young and talented engineers to participate in.  Dr Faishal has suggested that we do more, and I fully agree with him.  It is our aim to shape the construction industry into one that is progressive, professional and productive.  And we believe that the best way to do so is really to show that our professionals are competent, that they discharge their duties with care and that the end results are good quality buildings, safe buildings.  This is what the Bill seeks to achieve.

     We want to help our workers move up the value chain, improve their productivity, give them an attractive career path so that they can take home more pay.  And with a more attractive pay structure and better career prospects, we hope that more locals will join the industry.  This is what our new workers' registration scheme intends to achieve.  We will take Er Lee's suggestions to include foreign workers, be it traditional source or non-traditional source, in this registration scheme.  We will take that into consideration.  Again, we will also take Dr Faishal's suggestion of working closely with the institute of higher learning and 

BCA has been doing that, together with MOE, WDA and NTUC, to conduct career talks, exhibitions, scholarship seminars and various exercises to attract talent into the industry.  Recently, BCA has revamped its training institute into an academy for the built environment to provide more focus and high quality training for the professionals.  We like the "Bob, the builder" idea and we totally subscribe to the idea of having a builder that has creativity and believe in teamwork.  But we may have to find a name that is less gender-specific, with due credit to Er Lee who is sitting there.

     Madam, the proposed amendments will not only enhance building and construction safety, but also develop the industry to greater heights, and the changes are wide-ranging and adjustments have to be made.  But it is necessary to take a long-term perspective.  BCA will continue to work closely with the industry stakeholders, when formulating the detailed requirements in the regulations.

     Er Lee Bee Wah: May I have some clarifications, please?  In a design of the foundation for building, in one formula, you have geotechnical and structural parameters, and I can see the confusion that comes in when you have two bees involved in the calculation.  In fact, from the dialogue session that the engineers had with BCA, even among the BCA officers, the answers given seemed to be contradicting.  So I think this is something that we need to fine-tune and look into.  I queried them, in the past, which were the projects where they could show examples that if we introduced the PE (Geotechnical), then they would have avoided the problem totally.  Kong lie kong ker, they could only quote me Church Street. And I asked them which aspect of Church Street.  In fact, to prepare for this, I had lunch with Church Street's PE, and he also told me that he was doubtful with the introduction of PE (Geotechnical).  That problem could be avoided.

     Just now, the Minister of State mentioned that less than 1% of new projects are 30 storeys and above.  But is the Minister of State aware that there are some PEs where most of their projects are high-rise buildings?

     Ms Grace Fu Hai Yien: In reply to Er Lee's first question about how the work between a PE (Geotechnical) and a PE (Civil) has to be demarcated, I believe  that there are already cases where PE (Civil) seeks the specialist's inputs of PE (Geotechnical).  So I am sure, between the two professionals, they will be able to work out the arrangements.  But, as I said, what defines a complex piling foundation is something that will be set out in the regulations, and that is something that BCA will be drawing up in due course.

     And this issue about Church Street, I am not sure if I agree with Er Lee that we must wait for one building to either have structural problems or collapsing because of specific geotechnical issues before we will enact the Bill.  I think to do so would be very reactive and is not something that the Singapore Government is typically proud of.  We want to be responsive, and I think that, arising from the COI on Nicoll Highway, it has pointed out certain systemic problems in the industry, including in the area of TERS.  Because of that, we have reviewed the entire building process, including the permanent building works.  And we felt that it is necessary at this point in time to stipulate this change.  So whether the PE involved in the Church Street himself would say that it is effective, I would leave it to the industry and the professional bodies to make that judgement.

     Mdm Deputy Speaker: It is open to anybody with clarification.

     Ms Eunice Elizabeth Olsen: I thank the Minister of State for her reply.  I just like to ask if she could clarify one of the questions that I have asked, and that is whether there is a requirement for older existing buildings to meet the current accessibility standards under the building regulations and how does BCA intend to implement it?

     Ms Grace Fu Hai Yien: Existing buildings will be required to comply with the provisions if they undergo major retrofitting works.  Before that, we encourage building owners to undertake such changes by giving them incentives to do so.  So we are basically taking a two-pronged approach to both require them to do so under legislation and also to provide some incentives if they choose to do so before the law requires them to do so.

     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. - [Ms Grace Fu Hai Yien].

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

and who are temporarily in Singapore for the purpose of teaching, research or postgraduate study in pharmacy.  This scheme, comprising full, conditional and temporary registration, is modelled against that of the medical and dental professions.

Third: Register of Specialists

     Clauses 15 and 18 of the Bill provide for the setting up of a separate register for specialist pharmacists and the registration of such specialists.  Clauses 36 and 37 establish a Specialist Accreditation Board to define specialities and to determine the requirements for specialist registration.

     Pharmacists with specialised expertise are increasingly required, particularly in areas, such as oncology, cardiology, critical care and geriatrics, to ensure safe, evidence-based and cost-effective use of medicines for better patient outcomes.  Such specialist pharmacists will enable cost-effective drug prescribing, optimal dosing of drugs, reduction in medication errors and fewer drug-therapy related complications. 

     With the advent of molecular medicine, there will also be a need for targeted therapy, to deliver the right dose of the right drug to the right patient at the right time.  Specialist pharmacists in pharmacogenomics and nanotechnology will support such advancements in disease management from research to pharmaceutical manufacturing and clinical service.

     Responding to this sophisticated demand, we observe a growing number of pharmacists with such specialist qualifications.  They are mostly American Board-certified specialist pharmacists and they are providing an excellent level of pharmaceutical care to our patients.  But we need more.

     The establishment of a Register of Specialists will encourage more pharmacists to pursue postgraduate education in their chosen field.  Besides enhancing patient care, this will also make the professional environment here more attractive to well-trained foreign pharmacists and encourage their inflow into Singapore. 

Fourth: Singapore Pharmacy Council

     The Bill will establish a new statutory board, the Singapore Pharmacy Council.  Currently, the profession is regulated by the Pharmacy Board which is a department of the Ministry of Health.  Our proposal is to convert the Pharmacy Board into a statutory board and to enhance its regulatory powers.  The Council will comprise 11 members, nine of whom will be appointed by the Minister, with the Chief Pharmacist and the Head of the NUS Pharmacy Department (or designate) as ex-officio members.  This is provided for in clauses 3 and 4.  The Chief Pharmacist will function as the Registrar.

     Clause 5 of the Bill will strengthen the Council's ability to regulate standards of pharmacy practice and direct the development of the pharmacy profession.  The Council will now be able to make recommendations for the undergraduate courses of instruction, pre-registration training and compulsory continuing professional education for pharmacists.

Fifth: Enhanced disciplinary and health inquiry framework

     Currently, complaints made against pharmacists are dealt with by the Singapore Pharmacy Board.  The Board is empowered to discipline a pharmacist, after conducting an inquiry or after giving the pharmacist concerned an opportunity to explain himself.  The pharmacist may be issued a warning.  In more serious cases, he may be struck off the register.

     Part VI of the Bill establishes a more robust disciplinary and health inquiry framework for pharmacists, modelled after the medical and dental professions.  Under this system, complaints that the Singapore Pharmacy Council receives will be referred to the Complaints Panel.  From this Panel, a Complaints Committee will be instituted to inquire into the complaint.  After doing so, the Complaints Committee may either dismiss the complaint or refer the matter for a full hearing before a Disciplinary Committee. 

      Clause 42 of the Bill sets out the composition of the Disciplinary Committee.  It is empowered to take a variety of disciplinary actions against errant pharmacists.  For instance, under clause 46, it may strike him off the register or suspend him for up to three years.  It may impose conditions to restrict his practice, or to impose a penalty of up to $50,000.  The pharmacist or the complainant aggrieved by the decision of the Committee may appeal to the High Court.

     Clause 50 of the Bill establishes a Health Committee.  Its role is to inquire into the physical or mental fitness of a pharmacist to practise pharmacy, when concerns about the health of pharmacists are received by the Council.  The Health Committee will be empowered under clause 51 to suspend a pharmacist, restrict his practice, or, in cases of serious impairment, remove him from the register.

Sixth: Interim Orders Committee 

     Inquiries into disciplinary and health matters may take some time to complete and, presently, a pharmacist who is under investigation is still able to practise.  This may not be entirely satisfactory in some situations as there may be compelling reasons to suspend such a pharmacist from practising, even before the outcome of his inquiry, either for the protection of the public, or in the interests of the pharmacist. 

     Clause 53 allows the Council to appoint an Interim Orders Committee with the power to suspend or restrict the practice of a registered pharmacist for these reasons, pending the completion of disciplinary proceedings against him.  To safeguard the interests of the pharmacist, measures have been put in place in the Bill. 

Composition of offences

     Finally, clause 69 allows the Council, with the approval of the Minister, to prescribe offences which may be compounded and, where appropriate, to compound such offences.

Conclusion

     Mdm Deputy Speaker, our pharmaceutical services have seen many improvements over the years. But as medical science continues to develop, the pharmacy profession must be given the support and backing of this House to enable it to keep pace with the rest of the healthcare professions.    

     Mdm Deputy Speaker, I beg to move.

     Question proposed.

5.36 pm

     Mdm Halimah Yacob (Jurong): Mdm Deputy Speaker, I rise in support of this Bill.

     This is an important and timely Bill that will enhance the practice of pharmacy, upgrade the standard of professionalism of pharmacists and enhance patient safety.  Pharmacists are an integral part of the healthcare system as they help in administering the drug therapy to patients.  In many ways, they act as the safety net.  Together with the doctors, they review the medications prescribed to the patients and ensure that they are adjusted to fit the needs of the particular patient, taking into account the health condition and other needs of the patient.  As the Minister had described, they provide the "checks and balances in the medication use process - from doctors' prescriptions to drug administration."

     But for a long time, Mdm Deputy Speaker, they seem to be quite a neglected lot.  Even the public is not quite sure what role the pharmacists perform in the whole health care system.  In the hospitals, we are not aware of the important role that they play in drug therapy and, in the private retail pharmacies, their services are under-utilised.  This Bill would therefore provide greater recognition to the work of pharmacists and it is a progressive step.

     So, Mdm Deputy Speaker, I support the Bill and, in particular, I support the creation of the Register of specialist pharmacists.  Currently, there are already pharmacists who specialise in so many fields and the Specialists Register would give them due recognition.  The Specialists Register is also good for the public, as we now have a register to refer to in the event we need the services of a pharmacist in a certain area of specialty.  Some countries like the US and Canada already have such a register.  But we need to do a lot more to highlight the existence of such a register so that it would be of greater use to the public.  One problem is that, unlike doctors whose areas of specialisation, whether in paediatrics, oncology or gynaecology, can be easily identified by the public, it is a lot more difficult to know what the different areas of specialisation of the pharmacists are, especially those in the private sector.  So, to make it easier for the public to access the services of such specialist pharmacists, I would like to suggest that the Ministry of Health come out with a list of specialist pharmacists, together with their area of specialties, which could be publicised and made accessible to the public.

     Mdm Deputy Speaker, I also strongly support the focus on continuing education, which is critical for patient safety as pharmacists work in so many different areas in both the public and private sectors and they too need to keep up with improvements in the standards of patient care.  Continuing education will also further promote the specialisation of pharmacists in the different fields and ensure that only pharmacists who are adequately trained in the specific fields are allowed to administer drug therapy.  For example, pharmacists who have not had the experience of handling patient care will now have to undergo a course before handling patients, and this will most certainly enhance patient safety.

     Another good move is the Interim Register as there is currently a shortage of pharmacists and the existing legislation is restrictive.  The Interim Register, which allows the Singapore Pharmacy Council to admit foreign pharmacists with equivalent or relevant qualifications, subject to conditions, would provide an additional pipeline of pharmacists and help to address the shortage that we are experiencing.  I am sure that the same rigorous qualifications and standards required of local pharmacists would also be applied to these foreign pharmacists. 

     Mdm Deputy Speaker, let me now touch on two further areas.  There is a concern among Singaporeans on the increasing cost of medicines, whether medicines dispensed in the public sector or private sector hospitals and clinics.  As a result, we see many Singaporeans flocking to Johor to purchase medicines, which is not without risk, as there is no certainty that they are not purchasing counterfeit drugs which could worsen their condition.  I would therefore like to urge the Ministry to continue to monitor the price of medicines to ensure that they are affordable and accessible to Singaporeans.  In this regard, I would also like to urge the Minister to review the list of standard medicines which are subsidised and which are prescribed in our public hospitals and polyclinics.  There are quite a number of medicines prescribed to patients which are not subsidised although patients are told by their doctors that these medicines are necessary and critical to their needs.  So I urge the Ministry to regularly review the list of standard medicines to bring it up to date to include new and necessary drugs and minimise hardship on the subsidised patients. 

     Let me now come to my final point, Mdm Deputy Speaker, and that is the issue of whether we should consider separating the two acts of prescribing and dispensing of medicines.  Currently, doctors both prescribe and dispense medicines.  While it can be argued that this is convenient for the patient, as the least that a sick person wants to do is to go to another place to get his prescription, there is, however, a greater overriding consideration, and that is the patient's safety.  The Minister has explained at great length about the important role that pharmacists perform - if I may quote the Minister again - "...in providing the checks and balances in the medication use process - from doctors' prescriptions to drug administration". In the hospitals and polyclinics, this is the practice where doctors and pharmacists work hand in hand in administering drugs to patients.  But among the private sector GPs, this is not the case, and one has to ask whether, in the light of the current discussion in this House, this is in the best interest of patients. 

     Quite a number of countries already separate dispensing from prescribing of medicines, including the US, UK and, in Asia, Korea and Taiwan.  In Japan, this is not mandatory, but patients can ask for this separation of prescribing and dispensing, and it is estimated that about 50% of the patients have already done so, indicating that patients do want a second layer of review in the drug administered to them.  At the same time, cost could also be another consideration for such patients.

     Mdm Deputy Speaker, I understand that in Singapore's context, this cannot be done overnight as we need to first educate the public who are not quite clear about the role of pharmacists and who have been so used to doctors doing both prescription and dispensation of medicines.  Perhaps the first step that we can take is to encourage private practitioners to ensure transparency in their billings.  Today, we do not know how much of the bill that we are paying is for the doctor's consultation fee and how much of it is for the cost of the medicine.  So, if all doctors start by giving a breakdown of their fees, that would be a positive first step, and I would like to urge our doctors to start doing so.  Subsequently, we could make it easier for patients who want to separate prescribing from dispensing to do so, just like the Japanese system.  In this manner, we would progressively move to a situation where patients are given an option to have the medicine dispensed either by the doctor or by a pharmacist.  I do not know whether this is feasible at this point of time, but the key consideration for us should be what is in the best interest of the patient as we know that pharmacists play an important role in providing the checks and balances in drug administration so crucial to patients' safety.  Currently, with doctors prescribing and dispensing medicines in the private sector, this element is not present.  

     Mdm Deputy Speaker, I support the Bill.  I think this is a progressive and good Bill.

5.42 pm

     Dr Lam Pin Min (Ang Mo Kio): Mdm Deputy Speaker, pharmacists are health professionals who practise the art and science of pharmacy.  They typically receive a request for medications from a prescribing healthcare worker in the form of a medical prescription and dispense the medication to the patient and counsel them on the proper use and possible side effects of the drugs.  In this traditional role, pharmacists ensure the safe and effective use of medications.

     Nowadays, pharmacists also participate in the management of diseases, where they optimise and monitor drug therapy, often in close collaboration with physicians and/or other health professionals.  In many Western countries, specialties also exist within the pharmacy profession. Some examples would include oncology, cardiology, psychiatry and nutrition support pharmacists, just to name a few. 

     Pharmacists are therefore very skilled and professional individuals with specific knowledge that makes them a vital part of our healthcare team.  The proposed changes to the 22-year-old Pharmacists Registration Act is a major milestone and is necessary to ensure that the pharmacy profession remains current, relevant and competent, and to bring it to the next higher level of professionalism.

    The major changes introduced in this Bill are: 

     1)  Differentiation of pharmacist registration into full, temporary and conditional registration;

     2)  Introduction of the pharmacist specialist register;

     3)  Introduction of compulsory continuing professional education; and

     4)  Establishment of the Singapore Pharmacy Council.

Manpower requirements/registration of pharmacists

    Given Singapore's focus on the biomedical sciences and healthcare services, the pharmaceutical industry is enjoying an important role in our economic prowess. As one of the key strategic manufacturing sites of the biomedical sciences industry, Singapore currently holds six of the world's top 10 pharmaceutical manufacturing facilities.

     With the rapid growth in the fields of healthcare, pharmaceuticals, life sciences and research in Singapore, there is indeed an increasing demand for pharmacists.  Interestingly, there are currently just 0.3 practising pharmacists per 1,000 population here in Singapore, probably one of the lowest among developed countries, compared to 1.2 in France and Japan, and to 0.4 per 1,000 population in Denmark.

     Although the output of locally trained pharmacists in the National University of Singapore (NUS) has increased from 41 in 1996 to 115 last year, as what the Minister has mentioned just now, this is assessed to be insufficient.  According to the Ministry of Health's projection, ideally, 200 new pharmacy graduates should be needed every year. 

     To meet current and future demands, there is an urgent need to recruit from overseas.  In order to cater to this arrangement, one of the amendments to the Act is therefore to allow differentiation of the pharmacist register into full, conditional and temporary registrations, the latter being relevant to foreign trained pharmacists. 

   Whilst there is a requirement to augment the number of pharmacists in Singapore, there is also a need to be stringent in the selection and recruitment processes as a lowered standard of practice in the pharmacy profession may result in undesirable or sentinel events, which can affect the well-being and safety of patients.

    I would also like to suggest to the Ministry to identify and publish the list of recognised foreign institutions for the pharmacy degree so that Singaporeans who choose to study abroad and have the intention to return to Singapore upon graduation can be better informed when deciding on their varsity of choice. 

Pharmacist specialist register

     In order to support Singapore's vision of being a medical and biomedical science hub, pharmacists with specialised expertise are increasingly required.  Examples of specialisation include geriatrics, oncology and cardiology.  I would like to suggest the formation of a Specialist Training Committee (STC) to determine the relevant specialisation required to cater to the special needs of Singapore, taking into consideration the rapidly ageing trend and the increased prevalence of certain chronic illnesses.  The STC will also establish and maintain structured training programmes for both undergraduate and post-graduate training in the future. The recognition of pharmacy specialist is also welcomed as it provides a further route of advancement for pharmacists in Singapore.

Continuing professional education

    The introduction of continuing professional education is important in maintaining the standard of pharmacy practice in Singapore. This is in line with other healthcare professional groups such as the continuing medical education for doctors and the continuing nursing education for nurses.  Participation in continuing professional education will ensure that practising pharmacists keep current and well informed of the latest development in their areas of practice and specialty. 

    As evident from past reports of unexpected adverse events and drug interactions of certain medications, up-to-date knowledge of such events is crucial to the pharmacists so that they can advise the patients accordingly when dispensing the drugs.

   With the setting up of the Register of Specialists, it will be apt to classify the continuing professional education requirements to core and non-core, where registered pharmacists must clock sufficient points in their core area of specialty while the remaining points from non-core educational programmes. This is similar to that of the medical professional specialist CME requirement. 

Singapore Pharmacy Council

     The replacement of the current Pharmacy Board with a new statutory body, the Singapore Pharmacy Council, serves to broaden the role and enhance the regulatory function of the regulatory body.  The establishment of the Singapore Pharmacy Council is therefore essential to uphold the professional conduct of pharmacists, set required standards and disciplinary actions, and to provide an avenue for redress and complaints from patients on errant practitioners.

Conclusion

     Madam, for a country as modern and developed as Singapore, we lag behind the United States, Japan, United Kingdom and Australia in regulating the practice of pharmacy.  Given the importance of pharmacy practice and the effects of pharmaceutical products on a human body, the introduction of this Bill is necessary and timely.

    On that note, I support the Bill.

5.49 pm

     Dr Fatimah Lateef (Marine Parade): Mdm Deputy Speaker, I rise in support of the Bill.

    Gone are the days when doctors would register, treat, prescribe medication, prepare the concoction and elixir all by themselves.  Healthcare has evolved to become a very specialised, and, in fact, even a sub-specialised area.  The divide between dispensing and prescribing must be clearly defined. Here, I would like to clarify one of the Member's earlier query whether we actually break down costs into different types of treatment that are given.

     Currently, in our restructured hospitals, we have the bills being broken down into the cost for consultation, x-ray as well as prescription of medication.  Pharmacists are now the recognised experts in drug use development, prescription and also monitoring.  The Pharmacists Registration Bill will have a major role in ensuring that professional standards are maintained and it will also introduce what I would term the "fitness to practise" regime.

    In fact, pharmacists have now taken on a specialist role and they are involved in areas such as toxicology, poison centre management, psychiatry, oncology and also hazardous material handling.  Thus, the relevance of the specialist register as the industry progresses and evolves, the guidelines for temporary, conditional and full registrations are stipulated very clearly in this Bill, and this is very timely indeed as we realise the need to recruit foreign trained pharmacists.  With our current ratio of only 0.35 pharmacists per 1,000 population, we are indeed below first world standards. Our requirements are about 200 pharmacists per year.  And we also have to take into account the fact that we have a turnover in the industry, knowing that the pharmacists actually do face job stresses and they have competing needs as well. 

    I would also like to suggest that the Bill has allowances for the following two points.

    Firstly, for a pharmacist who has been on an overseas attachment or posting for a certain period of time, what would be the criteria for having their full practising certification upon return?  This needs to be clearly stated.  Secondly, how about the non-practising pharmacists who wish to keep their certification?  What requirements would they have to fulfil?  This would probably have to be in terms of continuing education programme participation.  And if they do decide to come back into active practice, it would indeed be necessary to have a short period of clinical supervision, depending on how long they have been out of clinical practice. 

    Pertaining to continuing professional development, this should be planned along the same lines as those in existence for doctors, nurses and also, recently, the practice of optometry.  As professionals, we cannot run away from the fact that our knowledge has to be updated all the time.  In this Bill, there is reference to the regulation of the grant and renewal of practising certificates. This is indeed a step in the right direction to help step up professionalism.  And I would urge the Ministry of Health to work closely with the School of Pharmacy and also with the practising pharmacists to get their inputs and feedback on this matter.

    As the public often is not able to differentiate between pharmacists, pharmacist assistants and the pharmacist technicians, I would also like to enquire as to whether there are plans to subject the pharmacist technicians to any form of regulation.  Also, we know that many general practice and private clinics do not employ pharmacists, but instead, they have clinic assistants. We also know that often, these are the people who do the handing out of medications prescribed by a doctor in these practices. Whereas it would have not been right to subject them to the same regulations as a professional, such as a pharmacist, can I put forth the suggestion for them to have certain training and guidelines followed by certification upon completion of a training course?  This would certainly go a long way in helping us move towards achieving 100% patient safety and safe prescribing.

   We have also heard of recent cases where physicians have been found to over-prescribe certain controlled drugs on a regular basis.  Perhaps, with knowledge, training and empowerment of these clinic assistants, we can reduce the incidence of such cases.  After all, one of the objectives of this Bill would be to enhance standards of patient safety and increase public confidence in pharmacy practice in a very structured and sustained way.

    About the appointment of advisers, besides the appointment of committees with general or special purposes, I would like to suggest the appointment of a legal adviser or advisers for particular proceedings of the Council. The Council will make the rules for the functions of these legal advisers who are appointed.  Clinical advisers too would be very useful and they should be specialists or experts in particular fields and their inputs would come in useful in handling complaints, drawing up guidelines and inputs on team practices as pharmacists, Mdm Deputy Speaker, are indeed members of the holistic healthcare team.

    Finally, the pharmacy business.  Pharmacists must have responsibility for the pharmacy business.  If the business is registered under a person's name, he or she would have responsibility of the pharmacy business carried out on that premises.  All pharmacy businesses must have a pharmacist name, either as the person in charge or as the adviser.  The pharmacist may be the person under whose name the business is registered, or the pharmacist may be appointed by the person in charge of the premises to have overall responsibility of the pharmacy part of the business.  The Ministry should also consider a register for retail pharmacy businesses to assist with the regulation process. 

     Finally, this Bill, Mdm Deputy Speaker, is a step in the right direction as we move towards and strategise for greater professionalism and, certainly, in our moving towards the future of healthcare in Singapore.  I support the Bill.

5.55 pm

     Mr Seah Kian Peng (Marine Parade): Mdm Deputy Speaker Sir, thank you for allowing me to speak on this Bill.

      This afternoon, as I was coming into this Chamber, I met the Minister of State, Mr Heng Chee How.  He told me, in his usual friendly way, that I had the honour of being the last speaker for the last Bill today.  After four long days of debate, I think I got his message loud and clear.  So I would keep my short speech shorter.

     First of all, I declare my interest as a Director of NTUC Healthcare Cooperative which runs a chain of retail pharmacies.

     This Bill is a comprehensive one, one which promises to give Singaporeans better healthcare professionals who are continuously trained, to prepare and deliver their medicines. We read daily of the new drugs and treatments that are coming online.  It helps us sleep better at night - certainly without the help of Valium - to know that there is a vigilant group of people keeping track of them.

     This is important as pharmacists are those whom we rely on to educate us about our medications. Knowing why we take certain medicines, how to take them, all these will help us to follow the instructions more faithfully than we would otherwise do.

     Madam, the new change in the Pharmacist Registration Bill is in line with the earlier changes in the Medical and Dental Act.  It is also in line with international practice where mandatory continuing education is already in place in Canada and the UK.

It is a fuller framework than the previous Singapore Pharmacy Board framework, with provision for registration of professionals, including specialists in areas such as oncology, cardiology, geriatric medicine and so on.  There will be a more varied career path for the practitioners and also better support for the healthcare system as a whole.

     There are three points which I would like to make.  The first is on the Singapore Pharmacy Council.  This is a new statutory board which the Bill will set up.  I suggest that the nine registered pharmacists, which will comprise the Council, come from a broad spectrum.  I would ask that one or two representatives from the retail trade be included in the Council.  This is to ensure that policies and rules can be more trade friendly.

     Next, on training.  Nanyang Polytechnic and, I believe, Ngee Ann and Temasek Polytechnics as well, all offer diploma courses leading to graduates  becoming pharmacy technicians.  The recent amendments to the Dentists Act now allows dental therapists to work under the supervision of a dental surgeon.  Could provisions be made for these pharmacy technicians to work in retail pharmacies where the skills demand is less exacting for them to dispense and to provide advice under supervision?  This would make them more valuable partners to the pharmacists.  Pharmacists would then be freed up for other work.

     Alternatively, perhaps these pharmacy technicians could be allowed to dispense items but not prescription drugs and sign for Schedule 1 poison items in a retail pharmacy environment,  again under the supervision of a cluster pharmacist because, nowadays, cluster pharmacists have to manage a few stores.  This, again, is to help ease the shortage of pharmacists and to allow the retail pharmacy chain to operate a value added drug store which sells everything except prescription items.

     Currently, the Singapore Pharmacy Board accepts overseas pharmacists from countries including the UK, USA, Australia and Malaysia for pre-registration training, subject to their passing the forensic law examinations, whereupon they can be registered and practise as a full-fledged pharmacist.  So I am glad to notice that there are provisions for full registration and conditional registration.  This will create an environment that attracts foreign talent, where under conditional registration, one could work here as a pharmacist.  However, I note that the areas are in patient care, teaching, research or as an expert consultant.

     I would like to ask the Minister for clarification.  Out of interest for the retail trade, especially in retail pharmacy, can it be widened and allow pharmacists from countries like, say, the Philippines or India, to work in the retail environment under certain conditional registration and subject to their doing on-the-job training and passing examinations?

     Madam, there is a severe shortage of pharmacists in Singapore despite the National University of Singapore's efforts to churn out more pharmacy graduates.  We heard recently that there are less than 120 graduates a year.  This compares to just 24 in 1982.  But high attrition and a growing market mean that demand is far more than supply.  Hence, this request that I am making.

     Mdm Deputy Speaker, on that note, I reaffirm my support for the Bill.

6.00 pm

     Mr Khaw Boon Wan: Mdm Deputy Speaker, first, let me thank the Members who have spoken in support of the Pharmacists Registration Bill.  As noted by the four Members, pharmacists now play a very important role in our healthcare system.  Pharmacists are the experts in drug use, development, prescription and monitoring, and they are no longer mere dispensers of medications, but have taken on many specialist roles.

     Dr Lam Pin Min commented that specialist pharmacists are especially needed to support Singapore's vision to be a medical and biomedical sciences hub.  It is therefore timely to set up this specialist register for pharmacists.

     Mdm Halimah suggested that we publish the specialist register and make it accessible to the public, and I agree.  The Singapore Pharmacy Council will do so.

     Members also supported the need for continuing professional education.  Dr Fatimah asked about the CPE requirements for pharmacists who were on overseas attachments or postings and the non-practising pharmacists who wish to return to active practice.  The new pharmacist registration regulations will spell out such CPE requirements.  Briefly, pharmacists who have been away from Singapore for more than 90 consecutive days will have their CPE requirements prorated.  Non-practising pharmacists can keep their names on the Register for up to five years without a practising certificate.  But when they wish to return to active practice, they would have to meet at least half of the required number of CPE points during the preceding 12 months in order to qualify for a practising certificate.  And it is certainly advisable for such pharmacists to undergo a period of clinical supervision to ensure competency.  Our institutions will provide the necessary support for such pharmacists.

    Dr Lam asked whether specialist pharmacists will require special CPE requirements through participating in CPE activities that will be relevant to their specialty, and the answer is yes.

     Dr Fatimah asked if we plan to regulate pharmacy technicians.  We now have about 450 pharmacy technicians in our healthcare institutions.  They are either diploma holders in pharmaceutical science and technology,  or they have successfully completed the certified pharmacy technician course.  Pharmacy technicians play a supporting role and they are under the direct supervision of pharmacists.  As the pharmacist takes full responsibility for the actions of the pharmacy technician, I think the current arrangement is satisfactory, and my Ministry has no plan to regulate pharmacy technicians for now.

     Dr Fatimah suggested that the clinic assistants working in private medical clinics without pharmacists should have proper skills training followed by certification.  The Singapore Medical Association currently runs such a certification programme in partnership with ITE.  The general practitioners should encourage their clinic assistants to attend such a programme so as to upgrade their skills.  As clinic assistants come under the direct supervision of doctors who are ultimately responsible for their work, it is in the interest of the doctors that their clinic assistants are properly trained.

     Mr Seah Kian Peng asked if trained pharmacy technicians can work in retail pharmacies.  The answer is yes, but they must be supervised by pharmacists who will be responsible for their actions.

     Mr Seah also enquired if pharmacy technicians can be allowed to dispense non-prescription drugs, such as pharmacy only medicines (POM) in a retail pharmacy under the supervision of an off-site cluster pharmacist.  This is permissible if there are approved provisions, such as video or tele-pharmacy facilities, in the retail outlet to enable the cluster pharmacist to exercise adequate supervision, even though remote.  Some pharmacies have already been approved for such a purpose.

     Mr Seah suggested that the Singapore Pharmacy Council should include wide representation, including at least one representative from the retail trade.  We will bear in mind this recommendation when we form the Council.

     Members have all supported the strengthening of the Pharmacy Council so as to maintain high professional conduct and standard.  As black sheep cannot be completely eliminated, some disciplinary actions  will have to be exercised as needed.  Dr Fatimah suggested that the Singapore Pharmacy Council appoint legal and clinical advisers to help the Council in some of their proceedings.  This is a sound suggestion for the Council to consider.

     Dr Fatimah also made some suggestions for the regulation of pharmacy business.  The Medicines Act and its regulations cover all matters pertaining to the regulation of pharmacy business.  These are currently being reviewed and my Ministry will study her suggestions.

     Dr Lam noted the shortage in pharmacists and supported the need to train more locally.  I understand that the NUS Pharmacy Department has plans to raise its student intake.  We will also recruit from abroad to augment local training.  But in so doing, I agree with Dr Lam that we must not compromise on quality.  Foreign-trained pharmacists will have to meet the same minimum criteria as our locally-trained pharmacists, and they will need to work under supervisory framework before they can apply to be fully registered.

     Dr Lam suggested that we list the pharmacy degrees that we recognise for the benefit of students who plan to study overseas, and we will do so.

     Mr Seah asked if we can allow pharmacists from countries like the Philippines or India to work in retail pharmacies under conditional registration.  This can potentially be allowed, but the Council will have to assess the specific pharmacy qualifications to ensure that they are of sufficiently high standard.

     Mdm Halimah mentioned the important topic of drug cost and making sure that they are affordable, particularly for the poor.  This is a continuing concern for me.  We review drug prices regularly and, in particular, the composition of drugs on the standard drug list is something that we review at least once a year.  I have an expert committee advising me.  They have to look at cost benefits, cost effectiveness and make their recommendations to the Ministry.  And we do periodically add to the list so as to ensure that drugs will always remain affordable to our people.

     I have looked at the composition of the national gross health expenditure, particularly the breakdown in the various items.  Singapore is the lowest among the developed countries in terms of drugs as a percentage of the gross health expenditure.

     Finally, Mdm Halimah asked if my Ministry would rethink the current policy of allowing doctors to both prescribe and dispense medicine.  As noted by her, in many countries, the two functions are kept separate, with doctors not allowed to dispense medicine, and in so doing, granting the pharmacists the sole dispensing right.  Mdm Halimah felt that such a system might be safer from the patients' point of view, as there would then be a proper check and balance.  She noted that this is already the case in public institutions but not yet in the private sector.

     While a case could be made to grant pharmacists the monopoly in dispensing medicine, our current system is not without its benefits.  First, as noted by Mdm Halimah, patients have the convenience of consulting a doctor and getting their prescriptions filled in one place without having to visit two places.  Secondly, the system of separating the two functions may end up more costly for the patients.  When we prevent doctors from dispensing, then we are restricting supply.  I doubt it will enhance consumer interest.  The key is whether the providers are competent in dispensing, and I think there is no doubt that the doctors are as competent as the pharmacists in doing so.  My natural instinct is to expand supply rather than restrict supply of providers.

     My preference is not to replace our current system but I will work to enhance it.  The key is to give our patients the choice to fill the prescriptions at wherever they wish, be it at the doctor's clinic, in a private pharmacy or even across the Causeway.  To achieve such an outcome, doctors should provide each patient with a clearly written, preferably computer printed, prescription.  This is already the case in public hospitals and polyclinics.  So Mdm Halimah's proposed first step that we should do, which I totally support, is that doctors in the private sector should do the same.  And given the high cost of medications prescribed by the specialists, the private medical specialists, in particular, should set the example and pave the way for this change in practice.  They should automatically issue prescriptions to all their patients without their patients having to ask for them.  And if the patients decide to buy the prescriptions from the medical specialists, then the cost of the medicine should be clearly printed on the clinic bill as a separate item from the doctor's consultation fee.

     We should expect such a level of transparency of all our doctors in Singapore.  Our patients should demand such a standard of transparency.  The public sector has demonstrated that it can be done and I hope the private sector will follow suit, beginning with the medical specialists.

     One suggestion that I recently received from a creative pharmacist is that, since our current regime does not separate the two functions, why not start by looking at those medicines which are particularly addictive, for example, Subutex or Dormicum, and restrict dispensing right to only pharmacists for that kind of addictive drugs.  That is an interesting idea from this pharmacist.  But when I think it over, there is no guarantee that the black sheep that we find amongst some doctors would not also appear in the pharmacist profession.  However, it raised a different suggestion in my own mind: perhaps we can consider this as one of the penalties or disciplinary actions that the Singapore Medical Council can impose on those GPs who are found to be flouting this rule, who are wrongly or unethically prescribing drugs like Dormicum.  Currently, in the tool box of  SMC is suspension from clinic practice.  I am going to suggest to them that we consider, in addition to this penalty, one of the penalties could be to suspend this errant GP for a certain period of no dispensing right of addictive medicines.  That is probably something worthwhile for us to think about.

     Mdm Deputy Speaker, I believe I have addressed all the comments raised by the Members.  I would like to thank them once again for supporting the Bill.

     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 Khaw Boon Wan].

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