UNSW ASIA

UNSW ASIA:

(Financial obligations): 10.

Mr Siew Kum Hong asked the Minister for Trade and Industry (a) whether the obligations of UNSW Asia are subject to a guarantee by the parent university in Australia; and (b) whether the Economic Development Board, when negotiating an agreement with a university intending to invest in Singapore, takes any measures to ensure that the university fulfills its financial obligations to its academic staff if the venture fails.

The Minister of State for Trade and Industry (Mr S Iswaran) (for the Minister for Trade and Industry): Mr Speaker, Sir, EDB generally does not require parent companies to give any over-arching guarantee on their Singapore operations. For companies who invest in Singapore, it is in their own interest to see that their Singapore operation is successful. Companies also value this operational flexibility. It makes Singapore an attractive place for business. This is also the case for educational institutions. The parent institutions have a strong interest

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to make sound business decisions about facilities, employees and students. If their Singapore operation fails, the parent institution will suffer significant reputational and financial loss.

The Minister for Trade and Industry had previously informed this House that as UNSW would not be able to meet its commitments to EDB, UNSW was required to return the disbursed loan and grant to EDB. The loan is backed by a bank guarantee. For the grants that had been given to UNSW Asia, EDB is currently in discussion with UNSW on its recovery.

Organisations based in Singapore are bounded by our laws and regulations. EDB does not interfere in the university's decision on employment policies beyond our legal requirements. The employment contract is negotiated and agreed upon by the university and its employees. Employees are encouraged to seek legal advice on their rights and consult with the university directly.

Mr Siew Kum Hong: My first supplementary question is to clarify whether the grants were disbursed to UNSW or UNSW Asia, and who would we be calling that back from because, as I understand it from the press reports, UNSW Asia is very much insolvent, in which case, unless you can get it back from UNSW, the parent university, there is not much chance of getting funds back.

My second question is with respect to the MOS' answer on the EDB not interfering with employment contracts. The number of academic staff at UNSW Asia had uprooted to come to Singapore, and this whole event has left them with a very unpleasant aftertaste when it comes to Singapore. My question to the MOS is whether the EDB and the Ministry accept that the reputation of Singapore is important and that, therefore, it is

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beneficial to invest some effort into ensuring that the reputation is not affected when things go bad.

Mr Iswaran: Mr Speaker, Sir, as far as the grant is concerned, the legal entity is the UNSW Asia. But as the Member has pointed out, the negotiation is now with the parent, UNSW, and the process is now one of engaging them in a discussion and negotiation to settle the final terms.

As far as the second point is concerned, on the impact on Singapore's reputation, I think in a way this is no different from any other investments we have attracted to Singapore. The implicit presumption in the Member's point is that somehow the employment situation in this particular instance has a wider implication on Singapore. All these institutions that we attract, that EDB courts to come in are usually very reputable and of international standing. They have a vested interest to protect their reputation, and that includes ensuring that they comply with the laws of the land, in terms of employment legislation and treating their staff fairly. From public accounts and reports in the media, it would appear that that seems to be the nature of the engagement between the parties concerned.

EDB rightly confines itself to what is really its remit, to ensure that the parties we attract to Singapore comply with our laws and that means all laws, including our labour laws, and then we leave it to the businesses to work it out. Whether they are university professors or engineers and wafer fabrication plants or indeed any other foreign talent or workers coming into Singapore, ultimately, their contracts would bind their obligations.