2nd Reading of the Transboundary Haze Pollution (Amendment) Bill - Closing Speech by Minister Grace Fu

1. Mr Speaker, I would like to thank Members for their unanimous support for the Bill and their very heartfelt plea to protect Singaporeans so that our people can have fresh air again.

2. Members have raised important questions about the scope of our powers, how these will be implemented, why we did not implement these changes earlier, and the impact we hope to achieve. I will respond to these points in turn.

SCOPE OF POWERS

3. Members have asked for more details about how the expanded powers will be scoped and implemented. They have also provided many suggestions on how we can implement these powers more effectively.

Risk of haze pollution

4. First, the risk of haze pollution and how we will determine it. Broadening the offence to “a risk of haze pollution” rather than “haze pollution” in Singapore will give us more options to direct preventive measures before the haze reaches us. But even as we do so, we will continue to use an evidence-based approach in deciding when to act.

5. Members, Dr Choo Pei Ling, Ms Kuah Boon Theng and Prof Kenneth Goh, and others have asked for more details on how we will determine this risk, and the safeguards in place.

6. NEA monitors fires and smoke haze in the region, as well as meteorological conditions such as rainfall, wind direction and speed.  It is deepening its capabilities to assess whether fires and smoke are likely to cause haze in Singapore. We have been getting those forecasts – bi-weekly, weekly, daily – and those are based on scientific evidence coupled with modelling. And we have accumulated significant experience in modelling. Having said so, forecasting is still science with art, and therefore it is not hundred per cent accurate. So we have to make some judgement and we will use the judgement based on the scientific data that we have in our hands.

7. We will take action under the THPA when this nexus to Singapore is clear. In practice, if the air quality is stable and in the healthy range, and the meteorological conditions do not indicate any risks of haze pollution in Singapore, NEA will not have any interest or reason to act, even if there are fires.

8. However, should we forecast that there is a reasonable likelihood of air quality deteriorating because of unfavourable meteorological conditions, and that the extent of land and forest fires is significant, NEA will have the basis to exercise a wider range of options without having to prove that the fire in a specific location has indeed caused haze pollution in Singapore.

9. The certificate of risk and deeming it conclusive ensures that our agencies are not delayed or obstructed by arguments about the level of risk affecting Singapore. Our aim is to allow agencies to move and react in a timely manner. To be clear, the certification does not mean or signify that an offence has been committed. The Government will still have to satisfy the Court that all elements of the offence are made out.

10. Assessing the risk of haze pollution in Singapore resulting from acts which may be a considerable distance away requires specialised scientific expertise, access to meteorological and other specialised data, and the ability to analyse this data. The DG will decide whether there is a risk of haze pollution supported by the expertise of NEA and based on the available data. There will be a robust process in place to support the DG’s decision which includes empowering NEA to appoint a panel of experts to advise the DG.

Penalties

11. On penalties, Members, such as Mr Yip Hon Weng, Mr David Hoe and Mr Gerald Giam, have spoken about the calibration of our penalties.   I would like to assure Members that we have calibrated the penalties under the Act carefully to ensure that they are fair, and practical while providing a suitable deterrent. Turnover-based fines were considered, but we decided to go with an absolute figure given the potential difficulties in obtaining information on turnover for every entity we may want to go after.

12. On the maximum fine defined in the legislation, penalties are ultimately decided by the Courts, based on the circumstances in each case. We do not expect that the maximum fine will always be imposed.

13. Our proposals aim to neutralise the economic incentive to be non-compliant. We increased our penalties but also introduced a disgorgement provision which will allow us to impose additional penalties to reflect the profits earned or losses avoided by committing an offence where appropriate. The disgorgement ensures that errant companies cannot retain the benefit of their irresponsible conduct.

14. Ms He Ting Ru and Eileen Chong suggested that the penalties on individuals who do not comply with notices under section 10 are too low at $50,000. We peg the penalties carefully to ensure proportionality and that our policy objectives are met. We have proposed enhanced penalties to increase the deterrent effect of the THPA.  With regard to non-compliance to section 10 notices, the proposed $50,000 penalty is several times higher than similar offences in other regulatory contexts. 

15. We should not focus on this particular offence alone.  Section 10 relates to a general power to obtain information, including from third parties. This means that anyone, including those who may not be related to the entities that burn, could be liable under this offence. The culpability can be quite low. Conversely, penalties for offences which attract higher culpability are correspondingly higher.  For example, under the proposed section 8C, Directors and Officers of companies who do not comply with the assessor’s directions can face penalties up to $20 million. Thus, the penalties framework in this Bill needs to be seen as a whole.

16. On Mr Vikram Nair’s question about whether the enhancements to legal service extend to civil actions under section 6, they do not, as the focus of Section 15 is on service of official orders and notices by NEA to carry out its duties under the Act.

No Retrospective Application of Powers

17. Ms Poh Li San has asked whether and how these new powers will apply to the investigations we have opened. The amendments to the offences and defences will not apply retroactively. Conduct before these amendments come into force can only be prosecuted under the existing THPA, with its existing penalties.

18. However, in making decisions under the new regimes for assessors, designation and putting on notice, we can look at past conduct. And if we do want to investigate or prosecute existing THPA offences, the improved procedures will remove hurdles that might stand in the way. Let me stress again that these procedural amendments do not retrospectively create new offences or increase the penalties applicable to the conduct that occurred before the amendments come into force. Any offences pre-dating the refreshed THPA will be liable for existing penalties.

Assessors

19. Many Members, including Mr Sharael Taha, Ms Jessica Tan, Ms Hazlina Abdul Halim, Ms Hany Soh, and Mr Saktiandi Supaat, have also asked for more details on how the assessment and designation process will work, including how we will ensure they are effective and targeted at the right entities. I would like to reassure Members that NEA will implement these powers in a measured and targeted manner.

20. Let me start with the direction to appoint assessors.

21. We will have clear criteria for issuing directions to appoint assessors. Broadly, these will apply to three categories of entities.

22. The first are those which have been convicted of an offence or failed to comply with directions under the THPA. This also extends to entities that the DG knows or has reason to suspect have engaged in conduct amounting to an offence, or who are unlikely to comply with any direction or notice under the THPA.

23. The threshold of “having reason to suspect” is not satisfied by mere speculation or an unsubstantiated allegation. It requires the DG to have a basis for the suspicion based on information and input received, from a wide range of sources, possibly including credible reports from other organisations and views of experts. The objective is to enable timely and proportionate action, while ensuring decisions are credible rather than based on conjecture.

24. The second group are those that the DG knows or has reason to suspect have business dealings with the entities in the first category. This extends to supply chain or business arrangements. However, we have expressly excluded certain regulated entities, leaving it to the regulator to enforce discipline where required.

25. For regulated entities, their respective regulators are better placed to make the necessary enquiries into such business dealings and take appropriate regulatory or supervisory action. For example, MAS can engage the financial institutions it supervises on their exposures and business relations with such entities, and the steps they are taking to identify, assess and manage the associated risks. 

26. The last category of entities is those that the DG knows or has reason to suspect are sufficiently related to entities in the other two categories, whether through control or management, or through being a parent, subsidiary or sister company.

27. We will be measured and targeted in who we issue these directions to. The goal is to ensure that we have the means to assess the risks posed by entities operating in sectors or industries that tend to contribute to haze pollution in Singapore.

28. For example, we know that certain agricultural and forestry activities, particularly where land clearing and plantation operations are involved, can give rise to risks of land and forest fires. Entities involved in such activities, or which have significant commercial relationships or supply chains connected to such activities, may therefore warrant scrutiny.

29. We will also be clear in what the assessors will need to do, and how they will work with identified entities. Detailed rules concerning this process will be set out in subsidiary legislation.

30. Assessor reports will be given to the DG and NEA to study. Depending on the results, NEA may issue a direction to the entity to take remedial action, publish the fact that the entity has received an adverse or qualified report, prosecute the entity for a section 5 offence, designate the entity under the new designation regime, or put the entity on notice.

31. Mr Vikram Nair and Mr Dennis Tan asked if the proposed section 23C would override legal professional privilege. The answer is no, it does not override legal advice or litigation privilege.  

Cost of Appointing Assessors

32. It is reasonable for entities to bear the costs of the directions. Members have asked about how we will ensure costs are fair. The entities we have appointed to the panel are known industry experts, with well-established rates. We will set out the terms of payment clearly in the directions issued by the DG. If entities do not pay for the assessors according to the terms of the direction, NEA may make payment of the sum owed to the assessor, which NEA can then recover from the entity as a civil debt. We believe this is a fair approach to both assessors and the entities subject to the direction.

Designation

33. Next, on designation. We recognise that this is a broad set of powers. We will be measured and focused in how we apply it.

34. Before considering designation, we will consider all available information, such as satellite imagery, available concession ownership information, and corporate data, including information contained in the assessor’s report, if available. Based on our findings, we will determine whether the entity should be designated and ascertain the type of restrictions to be put in place.

35. Designation can apply to four categories of entities. These include the three categories of entities who may be subject to directions to appoint assessors, as well as any entities who do not comply with our directions or who obtain an adverse assessment report.

36. Entities will be given the opportunity to clarify their circumstances and make a case why they should not be designated. After designation, entities can also make an application to cancel their designation.

37. Designation serves a different purpose from criminal prosecution. While criminal prosecution seeks to establish responsibility for offences committed and impose appropriate punishment, designation allows us to impose economic and financial restrictions on entities that fall within the statutory grounds of designation. The objective is to create real commercial consequences for irresponsible conduct, and incentivise entities to comply with the obligations and standards under the THPA. It also enables us to act preventively, without having to wait for a criminal conviction, to discourage business arrangements that may sustain irresponsible burning.

38. We will bear in mind the potential impact of the business restrictions imposed. When imposing restrictions, we will be judicious when specifying the extent of how far these restrictions will apply. We will also provide reasonable transition arrangements where appropriate, to minimise unnecessary disruptions to legitimate business activities.

39. Many Members including Mr Lee Hong Chuang and Ms Charlene Chen have also asked about the potential burden of complying with the restrictions, especially if companies need to do more due diligence.  In cases where the businesses did not know or did not have reason to believe they were engaging with a designated entity, they will not be penalised. As far as possible, we will minimise the compliance cost on SMEs.

Role of MAS

40. Members have asked how MAS will direct financial institutions to act in relation to a designated entity.

41. I understand from MAS that they take a risk-based and proportionate approach. MAS is concerned with errant entities and activities, not the agricultural commodities sector as a whole.

42. Banks are already expected to identify and manage environmental risks across their portfolios.  Where risks are heightened, banks should respond accordingly. This could include imposing conditions, reviewing financing terms, limiting further exposures or even exiting the customer relationship.

43. If NEA identifies an entity of concern, MAS will pay closer attention to how banks with exposures to that entity assess and manage the risks, and whether they have taken appropriate steps in response. What is appropriate will depend on the nature and materiality of the exposure and the risks involved.

44. Designation goes a step further. Where an entity is designated and specific restrictions on financial services are warranted, MAS will prescribe what financial institutions are required to do. These requirements can go beyond our existing environmental risk management expectations, and the relevant orders will be made public so that financial institutions are clear about what is and is not permitted.

45. We recognise that financial arrangements can be complex. That is precisely why MAS is involved. Any order will be drafted sensibly, taking into account practical constraints, such as syndicated financing where an individual bank may not be able to act unilaterally.

Persons on Notice

46. Members have also spoken about the importance of tracing accountability through the supply chain, and avoiding a situation where companies use subsidiary relationships to evade the law. We agree. To clarify, the main THPA offence already allows us to go after entities who condone conduct which causes or contributes to a risk of haze in Singapore. However, tracing these connections may not always be easy.

47. To give us an alternative way to take action, the Bill gives us an additional power to put entities on notice. This puts them under an obligation to take appropriate steps to ensure that their businesses and supply chains do not involve errant entities. This forms a complementary approach to designation. Instead of relying on Government to identify and designate individual entities, the persons-on-notice regime allows us to put the responsibility on these larger entities to ensure that their supply chains are clean.

Remedial Actions

48. Some MPs, including Ms Lee Hui Ying, have asked about whether the remedial actions will include environmental restoration. The Act allows the DG to impose remedial actions to prevent land or forest fires, such as peatland restoration.

Summary

49. In summary, our measures are targeted at entities responsible for causing or contributing to the haze, while avoiding onerous obligations for businesses operating legitimately and responsibly. We will implement these changes carefully and proportionately. NEA will continue to work closely with other agencies including MAS to effectively implement these powers.

50. Many Members have proposed various operational changes to the amended THPA. I really appreciate all of you for your very thoughtful suggestions, including terms of reference for the assessors, how do we apply the costs, and so on and so forth. There are many operational details that we have to work through, and we need the time to go through them after the Bill is passed. I would like to thank all of them for their thoughtful suggestions. We share their aim of ensuring that these powers can be and will be exercised fairly and effectively. We will consider these ideas as we develop guidance frameworks and subsidiary legislation as part of our implementation of the THPA.

WHY WE ARE ACTING NOW

51. Members have asked for more detail about what we have learnt from the past decade of implementing the THPA. Let me provide more context on why we are amending the THPA now, on an urgent basis, and answer questions about whether we could have done so earlier, especially for the key enhancements to existing THPA powers.

52. I believe Members remember the various concerns raised by our counterparts in the region after the passing of the THPA in 2014, and as we tried to progress on investigations related to the 2015 haze episodes.

53. Over the years, we pursued bilateral and regional cooperation to address the underlying causes of transboundary haze, while gaining practical experience of the challenges involved in enforcing the existing THPA levers.

54. The 2026 episode highlighted the complexities and persistent challenges of addressing transboundary haze, notwithstanding the national, bilateral and regional efforts of the past decade.

55. It reinforced the need to strengthen our domestic legal framework alongside these cooperative efforts.

56. This set of changes to the THPA is significant. It gives us the power to impose economic and financial costs on errant entities, in addition to legal penalties. This is not a decision to take lightly. We are dealing with complex corporate structures and arrangements, and our laws must give us sufficient flexibility and reach to investigate and act effectively.

57. We discussed these issues extensively amongst Ministers at the Homefront Crisis Ministerial Committee, before we made a deliberate decision to change the powers of the THPA with a set of enhancements that are practical and targeted.

58. Once we decided, the various agencies involved worked tirelessly to draft the amendments you see today.

59. We are making these amendments urgently as investigations into the 2026 haze episodes are under way. The expanded legal powers are critical in giving agencies the tools they need to make progress on these investigations.

Update on Investigations

60. Let me, at this point, provide an update on the ongoing investigations, and how we will use these new powers.

61. Regarding the four outstanding cases arising from the 2015 haze episode, our investigations remain open although time has lapsed because of procedural issues. We don’t have a lot to work with, but we will continue to explore available avenues to obtain the evidence. Three of the four entities investigated have also been identified in our investigations into the current haze episode. Their past actions will be considered as we investigate the current case.

62. All 10 of the Singapore-based companies have responded to our section 10 notices and agreed to appoint assessors. We will continue to follow up with these entities.

WILL THIS SOLVE THE HAZE PROBLEM ONCE AND FOR ALL

63. You may ask, or some Members have suggested, that with these changes, will we solve the haze problem once and for all.  While the amendments will give us more tools and powers, we should be clear-eyed about what legislation can achieve. There may be some companies that we can go after, but there are many more landowners or occupiers, including many small landowners, that we are not able to. We won’t be able to investigate all of them.

64. We should also expect to continue to face challenges with securing and verifying evidence.  There is no guarantee of a successful prosecution. And even if we do secure evidence and get a conviction, there is no guarantee that the practices will stop.

65. The underlying causes of land and forest fires will require sustained efforts by governments, businesses and communities across the region. The most effective solution remains to prevent and control fires at source, through close international cooperation, and individual efforts from businesses and the community. We would need to do so in cooperation with other countries and based on their environmental standards.

66. Many Members, including Ms Nadia Samdin, also spoke about the importance of bilateral and regional efforts to support the amendments to the THPA. We agree.

67. We remain committed to dealing with the haze through international cooperation, underpinned by constructive engagement. Minister for Foreign Affairs Dr Vivian Balakrishnan, Minister for Law Mr Edwin Tong, and I have remained in continued conversations with our counterparts throughout this process.

68. Singapore and Indonesia stand together in tackling this shared challenge, which affects millions on both sides of our borders. We recognise and appreciate Indonesia’s commitment and efforts to address the haze, including through our newly established Joint Task Force. We will continue to work closely with Indonesia and other regional partners, to strengthen information sharing, and evidence gathering.

69. In strengthening the THPA, we are doing our part to help tackle a common problem. Our measures are directed at all errant entities, including Singapore-linked companies. This complements efforts undertaken by the Indonesian authorities, in their own fight against haze.

70. Looking ahead, we will continue to work with our partners including in our role as host of the ASEAN Specialised Meteorological Centre (ASMC) and using our ASEAN Chairmanship in 2027 to support efforts to strengthen ASEAN’s long-term capacity to address transboundary haze.

CONCLUSION – WHAT DO WE HOPE TO ACHIEVE

71. In conclusion, Mr Speaker, the THPA is not a silver bullet. It is one of many tools we must use to address the transboundary haze situation. Even with expanded powers, we can expect challenges ahead of us in exercising these powers.

72. Transboundary haze is complex, but we are committed to doing what we can, within our powers, to reduce the incentives for unsustainable forestry and agriculture practices.

73. I emphasise that, in doing so, the realities require us to accept the limitations of our laws and our agencies’ reach on conduct outside of Singapore. We seek to work collectively with foreign agencies. Our law enforcement powers do not extend into other countries’ borders, and we respect the laws and sovereignty of every state, just like how we would not accept foreign laws infringing on our sovereignty.

74. The amendments we are making show our commitment to ensuring traceability of our supply chain, and curtailing economic benefits of companies engaged in or linked to unlawful practices.

75. Creating a strong and predictable legal framework is important for investor confidence in Singapore. By setting out the powers, conditions and processes in our legislation, we are providing a clear legal basis for enforcement. This provides certainty for businesses and investors, while making clear that irresponsible corporate conduct will not be tolerated.

76. Over time, the amended THPA will strengthen Singapore’s standing as a jurisdiction with credible and robust environmental standards. These changes will enable lenders, consumers, and traders to better discern responsible businesses from others. Singapore companies that comply with the new laws will distinguish themselves, in governance and in repute, and ultimately profitability and sustainability.

77. As a Government, we remain committed to protecting Singaporeans and Singapore as far as we can. 

78. Mr Speaker, in Chinese please.

79. <<跨境烟霾污染法令》（THPA）并非解决问题的万能方案，而是应对跨境烟霾问题的措施之一。即使这次通过修订条规，扩大了执法权力，实际执法过程中仍会面对不少挑战。 

80. 跨境烟霾问题复杂，我们在权限范围内尽我们所能，加强供应链可追溯性，并限制涉及违法活动或与这些活动有关联的企业从中获利。  

81. 建立健全且明确的法律框架，对于维持投资者对新加坡的信心至关重要。同时也明确传达一个信息：我们不会容忍企业不负责任的行为。 

82. 长远来看，修订后的法令将进一步巩固新加坡严格落实环境标准的国际信誉。也让贷款机构、消费者和贸易商更容易辨别负责任经营的企业。遵守新法令的新加坡企业，也将在企业治理和声誉方面脱颖而出，并最终提升其盈利能力和可持续发展能力。 

83. 政府将尽全力保护国人的健康 与环境。

84. Thank you very much, Mr Speaker.