Town Councils (Amendment) Bill – Speech by Sylvia Lim

(Delivered in Parliament on 10 March 2017)


I will focus on the issue of Conflicts of Interest and the Proposed Mechanism for Oversight by the Ministry and HDB.  In doing so, I will draw on my experiences as the former Chairman of the Aljunied-Hougang-Punggol East Town Council and the current Vice-Chairman of Aljunied-Hougang Town Council.


Conflicts of Interest

A key feature of this Bill is on Conflicts of Interest, as provided in Clauses 8, 9, 10 and 13.

First, let me say that the Workers’ Party agrees that Conflicts of Interest should be managed carefully.  This certainly applies to Town Councils which handle tens of millions of public funds each year, by way of S&CC payments from residents and government grants.  The Bill recognizes that Conflicts of Interest will arise from time to time, and need to be managed.  Indeed, the practice of declaring potential conflicts of interest and recusing oneself from decision-making is unobjectionable, and has been in place in our Town Council from inception.

The Bill focuses on the potential conflicts that can arise where a Town Council appoints a Managing Agent to manage the Town.   Clause 13 introduces a new Section 20(1A) that a person who exercises a significant influence over the Managing Agent cannot hold a Town Council position of Secretary, General Manager, Finance Manager or their deputies. The post of TC Secretary / GM is an onerous one, involving both compliance with regulations, and leadership of a large operation.  Where town management is outsourced to an MA, the person appointed to assume the heavy duties of Secretary / GM will not be a junior staff from the MA.  In fact, we know that prior to General Election 2011, Aljunied Town Council was managed by a Managing Agent where the TC Secretary / GM was the Managing Director of the MA.  So, conflicts or potential conflicts exist in PAP TCs as well.  Can the Minister tell the House how many of the current slate of TC Secretaries & GMs will have to leave their posts when this provision is effective?  Earlier, SMS Desmond Lee spoke about the C-Suite level at the MA being disqualified.  But the provisions say “significant influence” over the MA – surely this goes beyond the CEO level?

As far as Conflicts of Interest are concerned, we feel that in one respect, the Bill does not go far enough.  The proposed Section 15(2) will require the TC Secretary to maintain a Register of Declarations of Interests and potential conflicts of interest made by Town Councillors.  This Register of Declarations is to be kept and maintained by the TC Secretary, and each disclosure is to be brought up at the relevant TC meetings.  In our view, this is useful but does not go far enough.  Instead of just maintaining the Register, we would call for all such Registers to be published for the scrutiny of residents.  On our part, we are ready to publish the declarations related to Aljunied-Hougang Town Council.


Proposed Mechanism for Oversight

I next turn to Clause 24 which introduces a new Part VIA on Oversight and Monitoring of Town Councils.  Part VIA introduces new Sections 43A to 43H, basically giving tremendous power to the Minister to devise strategies for compliance reviews on TCs and for the Minister to order investigations into particular TCs.

These new provisions give the Minister powers that he did not have before.   This Bill presents an about-turn from the original intent of TCs, which was to empower MPs to run towns with minimal interference from the government.  These new provisions are also a likely response to the court judgment in the case filed by the Ministry against Aljunied-Hougang-Punggol East TC, where it was held by both the High Court and the Court of Appeal that the Ministry was not the proper party to sue Town Councils.  The Courts analysed that the framework of the TC Act clearly showed that the Minister was only entitled to intervene in very few and specific circumstances, and did not have any general power of oversight.  Insofar as this Bill purports to enable the Ministry to manage or even curtail a Town Council’s work, this goes against the original intent of forming TCs in the first place.

What is even more disturbing to me is the vast new powers given to the Minister to order investigations into the affairs of a Town Council if there are “reasonable grounds to suspect a material irregularity in or affecting the conduct of a TC’s affairs”. He may also order such an investigation if a TC under a compliance review does not produce certain information required by the review.

First, I would like to point out that there is already an existing framework in place.  As it stands, TCs undergo annual audits, and auditors flag out issues on an annual basis.  Where there is concern about a particular TC, the Auditor-General’s Office can be called in, just as the government did to AHPETC in 2014.  The AGO team would devote time and expertise to unravel any matters and issue public reports.  Matters can also be referred to law enforcement agencies, if warranted, as with the case of Ang Mo Kio TC’s GM being referred to CPIB.   So why the extreme step of giving the Minister investigative powers over TCs?  Furthermore, what amounts to a “reasonable suspicion of a material irregularity” is very subjective.  The Bill does not even require any irregularity to be proved, just a suspicion of a material irregularity.  What will trigger such an investigation is purely up to the Minister to interpret.


The Biggest Conflict of All

Secondly, and more importantly, the scheme as proposed perpetuates the biggest conflict of all.  Who is the gatekeeper of this regime?  The Minister for National Development.  But the Minister himself is supposed to be running a Town Council too, as are his Senior Minister of State and Minister of State.  His bosses, the Prime Minister, the Deputy Prime Ministers, and the Co-ordinating Minister for Infrastructure, are all also running Town Councils.  Their comrades in arms are running all the Town Councils in Singapore except one – our WP Town Council.  Is the Minister a suitable gatekeeper, with these massive conflicts of interest?

It is not possible to argue that the Ministry is a politically neutral body, as recent history, unfortunately, belies that claim.  Singaporeans will recall that during the General Election campaign in 2015, the Ministry was an active campaigner against the Workers’ Party, issuing statements practically daily on the alleged misconduct of AHPETC.  After Polling Day, the Ministry took a break and little was heard for weeks.  To take another example: we have also seen past records of how the Ministry advised a PAP TC how to make good a breach of the Town Councils Financial Rules, quietly behind closed doors, without any media release on the same.  These are but two examples of the double-standards practised by the PAP government.  It is, in our view, dangerous to arrogate to a partisan Minister the solemn duty of overseeing Town Councils, which are essentially political institutions.

Furthermore, according to the new S43E, the persons the Minister will appoint as inspectors of TCs include public servants and HDB employees.  Is this tenable?  These civil servants depend on their jobs to support their families.  Do we expect these HDB officers to issue stinging reports against the Town Councils run by the PM or the Minister for National Development?  If they do, they should be ready to throw in their resignations!

From the corporate governance standpoint, experts have noted that having TCs report to MND is problematic.  For instance, it was observed by Associate Professor Mak Yuen Teen that the current model had MPs as Town Councillors responsible for Town Councils that are overseen by the MND; but the MND was also accountable to the same people who are Ministers or MPs.  He said: “I think this creates, at least, perception issues… that the system might be unfair or lenient to Town Councils because the PAP dominates the government”.

The scheme proposed in Part VIA does not serve the public interest but the interest of the incumbent government.  We reject this scheme as being fundamentally flawed.


How to Safeguard Public Interest

We have two suggestions on how the Public Interest may be safeguarded in the context of TCs.

First, while we cannot accept what is proposed in Part VIA, we totally support the principle that TCs should be subject to regular audits and checks due to the significant amounts of public funds they manage.

In our view, instead of having the Minister direct partisan investigations, we should revive the audits by the AGO.  Town Councils were in the past audited by the AGO, and we believe the AGO should be tasked to audit TCs on a rotational basis i.e. a few TCs could be picked each year for audit.  The AGO is an Organ of State under the Constitution.  It fiercely defends its independence, and has earned a good reputation for highlighting problems in government departments and statutory boards.  Such a scheme of AGO audits would engender greater public confidence that the exercise is impartial and focused on what the public interest is – safeguarding public monies.

Our second suggestion involves the resolution of disputes or differences between MND, HDB and other government agencies on the one hand, and Town Councils and residents on the other hand.

The new Section 21A will require Town Councils to “work co-operatively and collaboratively” with HDB, NEA and others.  There seems to be a presumption in the Bill that the government agency is always right, the TCs have no legitimate case, and TCs should simply comply with what the HDB or NEA tell it to do.  TCs will be liable to fines if there is non-compliance.  This is not a balanced perspective.

I will give just 3 examples to illustrate.  For instance, the HDB may wish to erect structures that would become a burden for TCs to maintain. Or government agencies may demand information from TCs in prescribed formats, which non-PAP TCs will incur significant time and costs to produce.   Or, the HDB may take a hands-off approach when TCs or residents face problems with DBSS flats, resulting in slow resolution or non-resolution of issues by the developer.

It may be natural for the HDB to defend its own interest, but that does not equate to the public interest.

Currently the dispute resolution mechanism as between government agencies, Town Councils and residents is the Courts.  This is not ideal, as Court processes are time-consuming, and costly to Town Councils and residents.  Going to Court is also adversarial in nature, and would jeopardise the relationship between the government, the TC and residents.

It is necessary to put in place a simple mechanism to help resolve issues that crop up from time to time between MND, HDB, NEA and other agencies, and TCs and residents.

We suggest the setting up of an independent Housing Tribunal authorised to mediate and adjudicate disputes relating to the management of public housing.  The Tribunal should be chaired by a Judge and have members who are qualified in relevant fields such as engineering, architecture, project management and horticulture.   The Tribunal could function with procedures which are low-cost and less formal.  Where the Tribunal makes a decision, its decisions would be binding unless on an error of law, which should be appealable to the Courts.  The setting up of such a Housing Tribunal would go a long way towards having a more considered and just resolution of disputes, and residents would ultimately benefit.


No Support of Bill unless Clause 24 removed

For the reasons I have stated, the Bill has some merits – such as explicitly requiring management of conflicts of interest and accountability, which we fully support.  But there are other parts, such as the new Part VIA, which are fundamentally flawed due to the extreme conflicts of interest they perpetuate.  The provisions are also prone to abuse by the incumbent government.

We ask the government to remove Clause 24 that introduces the new Part VIA, and instead use the existing laws and rotational audits by the AGO to safeguard the public interest.  In addition, we ask the government to set up a Housing Tribunal along the lines of independence suggested.

If the government cannot agree to remove Clause 24, the Workers’ Party will oppose the Bill.