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

1. Mr Speaker, Sir, I move, “That the Bill be now read a second time.”

2. Singapore has just experienced the most severe haze episode since 2015. For weeks, Singaporeans had to contend with unhealthy air quality, disrupt their daily routines, and limit outdoor activities. Businesses and workers were affected, and we saw hundreds more people visiting the doctors each day. Singaporeans were understandably concerned about their health and well-being.

3. Transboundary haze is not simply an act of nature. It is driven in significant part by human activities, including irresponsible land-clearing and management practices such as slash-and-burn and peatland drainage. We recognise that the agroforestry sector plays an important role in supporting economic development and providing jobs and livelihoods for millions of people across the region.

4. However, these economic activities must be carried out responsibly and sustainably. Irresponsible practices may generate considerable commercial benefits for the companies responsible, while leaving millions of people across Southeast Asia to suffer and bear the consequences of haze pollution.

5. More than a decade ago, we enacted the Transboundary Haze Pollution Act, or THPA, to hold those responsible for transboundary haze accountable.

6. But enforcing laws against activities that take place overseas is complex. We need effective powers to protect Singaporeans and hold errant entities accountable, while respecting the sovereignty of other countries, upholding international law, and avoiding extraterritorial overreach. This was the balance we sought when we enacted the THPA in 2014.

7. Following the recent haze episode, it is clear that the status quo is not tenable. Many Singaporeans want to see more effective action to prevent haze and hold those responsible accountable. The Government shares these concerns.

8. Importantly, our experience in investigating haze incidents has given us a much better understanding of the practical challenges involved, and the changes needed to make our laws more effective.

9. We need better ways to obtain and verify information, trace complex corporate relationships, and impose meaningful consequences on errant entities, even where criminal prosecution proves difficult. We also need to be able to intervene earlier, before haze pollution reaches Singapore.

10. We therefore have to strengthen our laws. And we must act quickly. Investigations into the recent haze episode are already underway. Evidence may be lost or altered, business arrangements may change, and the longer we wait, the harder it may become to establish responsibility.

11. This is why we are introducing this Bill now, under a Certificate of Urgency. Our objective is to give agencies stronger and more effective tools to investigate irresponsible burning, establish accountability, and impose meaningful consequences on those responsible.

12. Ultimately, our purpose is to protect Singaporeans from the harmful effects of haze pollution. Hence, the powers under this Bill will be directed at activities that cause or contribute to haze pollution or a risk of haze pollution in Singapore.

13. At the same time, we should be realistic. The haze episode this year reminds us just how complex this problem can be to resolve. Haze is inherently a transboundary problem. Fires can occur throughout the Southeast Asia region. Our ability to act against those that are responsible will continue to be constrained by the limits of our jurisdiction.

14. Addressing the underlying causes of land and forest fires will require sustained efforts by governments, businesses and communities across the region.

15. The changes we are proposing will not guarantee successful prosecutions, nor will legislation alone solve the transboundary haze problem. But they will strengthen our ability to act to protect Singaporeans, including by imposing economic consequences on errant entities even where criminal prosecution remains difficult.

WHAT ARE THE AMENDMENTS?

16. The Bill proposes two sets of amendments.

17. The first involves a fundamental change in our approach to investigations and enforcement under the THPA. It will give us a larger set of tools to investigate commercial links and impose restrictions across business arrangements and supply chains to hold entities accountable.

18. The second group of changes enhances the original provisions under the THPA. These changes build on the lessons learnt from enforcing the THPA. They are meant to remove legal barriers to taking action, while remaining aligned with international law.

CHANGING OUR APPROACH TO INVESTIGATIONS AND ENFORCEMENT

19. Let me start with the first set of amendments, to provide us with a larger set of tools to investigate commercial links and hold entities accountable. There are three key shifts at the core of our approach:

20. First, we will enhance our ability to establish the facts. This is critical because obtaining reliable evidence is one of the main challenges in enforcing the THPA.

21. Our investigations may delve into complex corporate structures, supply chains, and business arrangements. The entities involved may have multiple layers of ownership and control. Establishing who is responsible and how different parties are connected to the burning can be difficult.

22. To address this, we propose to empower the Director-General of Environmental Protection (DG) to require entities with suspected links to haze pollution in Singapore to appoint expert private sector assessors.

23. This gives legislative backing to the panel of assessors that we have announced. The DG will specify the assessors and terms of the assessment in the direction to an entity. The entity receiving a direction must engage the assessors at their own expense.

24. To be clear, a direction to appoint an assessor does not necessarily mean that the entity has committed or is suspected of having committed an offence.  It is meant to establish the relevant facts.

25. The assessors will submit their evaluation reports directly to NEA. These reports will help NEA establish the relevant facts and decide what further action, if any, is appropriate. An entity may be cleared of wrongdoing or may be subject to further enforcement action. The assessors do not determine guilt; decisions on enforcement remain with the relevant authorities, and our courts will determine liability.

26. These changes will not remove all the challenges of tracing overseas activities. But they will provide us with another important avenue to obtain information, understand complex business relationships and hold responsible entities accountable.

27. Next, we will expand the tools we have to hold companies accountable by going beyond the immediate concessionaires to their supply chains, related corporates, and financiers.

28. We propose to do so by giving the Minister the power to designate errant entities or individuals who have been convicted of an offence under the Act, whom the Minister knows or has reason to suspect have engaged in conduct constituting an offence, who have failed to comply with relevant directions or notices, or who have gotten an adverse assessment report.

29. Designation will enable the Government to impose orders restricting business dealings with the designated entity or individual. These may include the supply or purchase of goods and services, or the provision of loans and other support.

30. It will be an offence for entities or individuals to do business with designated entities in contravention of such orders, with a maximum fine of $1 million for each contravention, and an additional fine of up to $100,000 each day the contravention continues.

31. These restrictions will not be administered by MSE alone. Where restrictions concern services provided by financial institutions, the Minister-in-charge of the Monetary Authority of Singapore (MAS) will determine and administer the relevant orders to hold designated entities accountable.

32. The power to designate and impose restrictions is meant to impose economic consequences on those responsible for irresponsible burning or with established links to irresponsible burning. At the same time, the prohibitions ensure that others do not deal with such designated entities, including through complex business arrangements or corporate structures.

33. Designation, however, will not be sufficient. It may not be practical for the Government to identify every entity involved in burning, or every company involved in its supply chains. Instead, we may want to take action against the larger corporate entities above these individual entities directly.

34. For this reason, we will also introduce a power to put certain entities on notice not to deal with entities that cause or contribute to fires posing a risk of haze pollution in Singapore. This will apply to entities that have relevant connections to activities associated with burning, including large corporations operating in the forestry and agricultural sectors.

35. Entities put on notice will be required to take appropriate steps to ensure that their supply chains and business arrangements do not involve entities that cause or contribute to such fires. Failure to comply without reasonable excuse will be an offence.

36. These obligations are intended to strengthen due diligence and responsible business conduct across the supply chain. Companies will be expected to take reasonable steps to identify and address the risks within their business arrangements. The objective is not to impose an impossible guarantee that no risk will ever arise, but to ensure that companies do not turn a blind eye to irresponsible forestry and agriculture practices.

37. In addition to these changes, we will also provide powers for NEA to publicise lists of entities that have not complied with notices or directions issued under the Act, or who have been given a direction to appoint an assessor, among others. This will ensure transparency on the use of these powers, and where wrongdoing or non-compliance has been established, strengthening our public accountability.

ENHANCING THE EXISTING POWERS UNDER THE THPA

38. In parallel to our expanded approach to investigations and enforcement under the THPA, we will also enhance the existing powers we have.

39. First, we will modernise the statutory requirements for serving documents under the Act. In addition to the existing modes, the amendments will provide for electronic service and specified forms of substituted service, including publication through public media or on NEA’s website.

40. This will help address practical difficulties in serving notices and initiating formal processes involving foreign entities. It will also enable us to serve notices for information and notices to attend court more effectively.

41. These changes do not guarantee that overseas entities will cooperate all the time. But they will remove procedural obstacles that have constrained our ability to proceed with investigations and legal processes.

42. Next, we will also give the DG and authorised officers the power of arrest in Singapore, to enable them to secure the cooperation of persons of interest more effectively, where necessary, and in accordance with the law.

43. Third, we will make explicit that THPA offences may be heard in court in the absence of an accused person in specified circumstances. This is consistent with existing court procedures where the Court is satisfied that the relevant summons or notice has been duly served, the accused person was duly informed that the matter can proceed in his absence, and that there is no sufficient reason for the matter to be adjourned.

44. Some examples where this existing procedure has been used include prosecutions against a company for failure to file annual returns under the Companies Act, or against an employer for failing to pay CPF contributions. 

45. These amendments will help ensure that entities cannot frustrate enforcement simply by being difficult to contact or by remaining outside Singapore.

46. Fourth, we will expand the scope of our provisions to include “risk of haze”, so that an entity may be held liable when its conduct causes or contributes to a land or forest fire overseas that poses a risk of haze pollution in Singapore, even if the haze has not reached Singapore.

47. The intent of this change is to give us the option of taking preventive action before the haze reaches Singapore. It does not change the territorial nexus we used in scoping the original THPA.

48. We do not intend to direct our powers at every fire in the region. We must focus our resources where there is a credible risk of haze affecting Singapore. It would not be realistic or prudent to investigate every fire across the region.

49. NEA will therefore continue to maintain indicators to assess whether fires pose a risk to Singapore. This is no different from what it already does today. These will include factors such as their distance from Singapore, the duration and extent of burning, and prevailing wind directions and meteorological conditions. The Bill also provides for a committee to advise the DG on the assessment of risk.

50. These changes will give us the flexibility to act in a wider range of circumstances. However, we will continue to be focused in terms of which fires we will look into. We will be measured and proportionate in how we use the powers under the Act.

51. Fifth, we will tighten the statutory defences within the Act to make clear what responsible behaviour entails.

52. The current THPA affords entities three key defences. First, if the fire was due solely to natural disaster or an act of war. Second, if the fire was caused by another person acting without the accused’s knowledge. Third, if the defendant demonstrates that they have taken reasonable measures to prevent and fight the fire.

53. We will amend the THPA to tighten these statutory defences. Those seeking to rely on a defence will now need to prove that the fire was caused by another person acting without their knowledge, AND that they have taken reasonable measures to prevent and fight the fire.

54. This recalibrated defence sends a strong signal of our expectations. Entities are expected to take sufficient care to avoid burning on their land. It will no longer be sufficient to simply claim that another person caused the fire.

55. Lastly, we will enhance the penalties under the THPA, to achieve a stronger deterrent effect.

56. The original penalties under the Act were comparable to prevailing penalties for domestic pollution offences. As we amend the THPA, we recognise that the serious harm of transboundary haze needs to be deterred by stronger penalties, to underscore the gravity of such offences.

57. We will therefore be increasing the fine for the main offence of causing or contributing to land or forest fires with a risk of haze in Singapore from $100,000 per day to $1 million per day. The maximum aggregate fine will also be increased  from $2 million to $20 million. Other penalties within the Act will also be increased proportionately.

58. This increase was calibrated with reference to existing legislation, and the financial scale of the companies involved. The maximum fine of $20 million is double the $10 million maximum under the Online Criminal Harms Act, which was recently increased from $1 million. 

59. In addition, we also propose to introduce a provision allowing the Court to assess the profit gained or loss avoided as a result of committing the offence, and to impose this as an additional penalty on the entity convicted. This will enable the Court to disgorge any benefit obtained from the offence.

60. I have already explained the challenges of gathering evidence outside of Singapore. We will therefore also introduce a civil penalty framework into the THPA, so that there is another route to take errant entities to task. This will give NEA more flexibility in deciding how to deal with contraventions, and to deal with those who seek to hide from our criminal jurisdiction.

61. Under this framework, NEA may, with the consent of the Public Prosecutor, bring an action in court seeking a civil penalty for a contravention of the Act, with a maximum penalty of $10 million. There are clear provisions to ensure that the entity is not doubly punished – the civil penalty framework cannot be used in tandem with criminal prosecution in any single case.

CONCLUSION

62. Mr Speaker, transboundary haze remains a difficult problem that Singapore cannot resolve alone.

63. We will continue working with our neighbours to strengthen regional cooperation and prevent fires at source. The Foreign Ministers of Singapore and Indonesia have agreed to establish a Joint Task Force to strengthen information sharing and ensure closer coordination. We welcome the steps taken by Indonesia on the ground to prioritise fire prevention as a long-term solution.

64. But we must also do what we can within our own jurisdiction, to protect our people from the harmful effects of haze. The amendments in the Bill will strengthen our ability to establish responsibility, intervene early, and impose meaningful consequences on errant entities. 

65. Mr Speaker, I beg to move.