CHARITIES BILL

Order for Second Reading read. 4.22 p.m.

The Minister for Finance (Mr Hon Sui Sen): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Charities in Singapore are normally registered as companies limited by guarantee or trusts or societies. They are under the supervision and control, when necessary, of several authorities, namely, the Attorney-General, the Commissioner of Inland Revenue, the Public Trustee, the Registrar of Companies, the Registrar of Societies and the Ministry of Social Affairs, each with limited scope and powers. There is no single supervisory authority to ensure the effective use of charitable resources. There is also no uniform policy or set of rules to govern the setting up of charities or to regulate their activities.

It is important that the activities of charities are in consonance with their declared objectives because charities receive indirect Government subsidies through income tax and estate duty exemptions. Many charities also receive annual grants from the Government or contributions from the public.

The Charities Bill, 1982, seeks to make provision for the registration and the better administration of charities. It establishes the office of the Commissioner of Charities and confers upon him a wide range of powers over charities. It is based essentially on the United Kingdom Charities Act, 1960, with modifications to suit circumstances in Singapore.

Clause 3 of the Bill provides for the appointment of the Commissioner of Charities and other officers to assist him in the discharge of his functions, while clause 4 specifies the general functions of the Commissioner. His main function is to promote the effective use of charitable resources by encouraging the development of better methods of administration, by giving charity trustees information on matters affecting the charity, and by investigating and checking abuses. However, he is not empowered to act in the administration of a charity.

The Commissioner is required under clause 5 to establish and maintain a register of charities. Every charity is required to be registered with the Commissioner, unless it is an 'exempt' charity or is otherwise excepted from registration by regulations. An exempt charity is one which is exempt from the supervision and control of the Commissioner. It is incumbent upon the charity trustees to register the charity, if it is not exempt or excepted from registration. A fine not exceeding $2,000 will be imposed on any trustee of a registrable charity who fails to register with the Commissioner.

Clause 6 allows persons who are or may be affected by the registration of an institution as a charity to object to such registration. Appeals against the Commissioner's decision to enter or not to enter an institution in the register of charities are to be made to the High Court.

The Commissioner is empowered under clause 7 to institute inquiries into charities other than exempt charities. Such inquiries can be made either for general or specific purposes and may be conducted either by the Commissioner himself or a person appointed by him. The Commissioner can also under clause 8 call for documents and search the records of any charity.

Charity trustees are required under clause 9 to submit annual statements of accounts of their charity to the Commissioner. This does not apply to exempt charities and those which are excepted from this requirement by regulations. The same clause also empowers the Commissioner to have the affairs and accounts of any charity investigated and audited and to charge the expenses of such investigation to the charity.

Clauses 11 and 12 incorporate the cypr6s doctrine and specify the circumstances under which the doctrine of cypr6s can be applied so that an intention to benefit charity which cannot be literally fulfilled will be effectuated in a manner nearest to that indicated by the benefactor.

Clause 13 provides for the vesting of charity property in the Public Trustee by order of the High Court and for its subsequent discharge. The property may be vested in the Public Trustees with or without powers of management.

Clause 14 gives the Commissioner concurrent jurisdiction with the High Court for the purposes of establishing a scheme for the administration of a charity; appointing, discharging or removing charity trustees, or removing officers or servants; and vesting or transferring property. However, such a jurisdiction can only be exercised with the consent of the Attorney-General.

Clause 15 empowers the Commissioner to act for the protection of charities. He may remove or suspend a trustee in cases of misconduct or mismanagement and prevent the operation of a bank account.

Clause 18 specifies the persons who can institute legal proceedings in relation to a charity. All proceedings in the High Court must have the approval of the Commissioner, except those taken by the Attorney-General.

Clause 19 allows the Attorney-General, under certain circumstances, to apply for the winding up of a charitable company. It also prevents a charitable company from changing its memorandum and articles to enable it to attach new trusts to property, other than subscribed or guaranteed capital, acquired before the change.

Charity trustees are required under clause 20 to keep proper books of account regarding the affairs of the charity and to preserve them for at least seven years.

Clause 21 specifies how notices of charity meetings are to be given, and clauses 22 and 23 deal with the orders of the Commissioner and their enforcement.

Clause 24 provides for rules of court to be made regulating appeals against orders or decisions of the Commissioner to the High Court.

Clause 25 empowers the Minister for Finance to make regulations under the Charities Act.

Sir, I beg to move.

Question proposed. 4.30 p.m.

Dr Ow Chin Hock (Leng Kee): ( In Mandarin): Mr Speaker, Sir, I support the Charities Bill introduced by the Minister for Finance. As pointed out by the Minister, the control and supervision of charitable organizations and their activities have all along been shared by various Government departments. We cannot therefore correctly and fully assess the extent of activities of all our charitable organizations - the amount of donations collected by them every year, and how these sums are distributed or used. This Bill seeks to provide for the registration of all charitable organizations other than exempt charities such as educational and religious institutions and hospitals established by an Act of Parliament or any institution as may be declared by the Minister.

This Bill also provides for the appointment of a Commissioner of Charities with considerable power to supervise and control charitable organizations and their activities. Because of the power vested in him, the Commissioner can more effectively carry out his functions, and also more effectively enable donations and funds collected by charities to be distributed and applied more efficiently and equitably. At the same time, the Commissioner will also be able to collect relevant statistics and information on the charities and their activities and report to the Minister and Parliament.

Other than the advantages of administration and the collection of information, clauses 7, 8 and 9 of the Bill also empower the Commissioner of Charities to investigate accounts, to institute inquiries and to call for documents and to search records relating to any charity. In this way the Bill will prevent any undesirable elements from claiming to be a charity under false pretences and so deceive members of the public for their ulterior motives. Indirectly, the Bill also protects the reputation of genuine charities from being soiled or damaged by the fishy activities of such undesirable elements. I hope the Commissioner will, in his yearly report, include items on any incidents of any abuse of charities and the results of investigation.

The second point I wish to raise relates to the definition of "charity". Clause 2 defines "charitable purposes" as purposes which are exclusively charitable according to Singapore law, and "charity" as any organization established for charitable purposes. We all know that charity is a virtue. According to the international Encyclopaedia of Social Sciences, St. Augustine regarded charity as a virtue which unites us with God. Thomas Aquinas also regarded charity as the foundation or the root of all virtues, while "ren", namely, humanity or kindness, the supreme concept of virtue of Confucian thought, also connotes charity. However, religious and ethical concepts and considerations about the term "charity" are rather abstract and general. They may not be applicable in the legal field.

Clause 6, subclause (2) empowers the Commissioner of Charities to decide whether or not an organization is a charity and to be registered as such. If there is dissatisfaction with his decision, sub-clause (3) provides an appeal to the High Court. But it would be far better for the Commissioner to formulate guidelines on these terms after consulting some charity organizations rather than leaving it to disputation in court.

When talking about charities, it reminds me of the Spyros tragedy that occurred on 12th October, 1978. Many members of the public voluntarily came forward generously to donate towards the aid of the victims and their families. The two major Chinese newspapers, Nanyang Siang Pau and Sin Chew Jit Poh, within one month collected $3 million which was transmitted to the Ministry of Labour. The two newspapers are cultural organizations and they are also registered companies. I wonder whether this Charities Bill will be applicable to them in similar cases in the future or whether they need to get the written permission of the Commissioner of Charities before they are allowed to collect by proxy such donations. Many an ordinary man in the street has a soft spot in his heart, sympathy and compassion. Whenever necessary, he will come forward with donations and make contributions to show his care for the society, unlike certain opportunistic politicians who can only shout empty slogans.

I would like to ask whether the Minister is willing to formulate certain regulations for the guidance of such non-charitable organizations to help them continue participating in charitable acts.

I notice that while clause 10 mentions that the Commissioner -has the power to exchange information with various Government departments, it has singled out the Department of Inland Revenue. Perhaps this is due to the fact that supervision and control of charitable organizations and work have a lot to do with the checking of accounts, donations, and their distribution. In order to avoid too much red tape and to increase efficiency, I would suggest to the Minister that a certain senior officer of the Inland Revenue Department be appointed Commissioner of Charities, in addition to his own post in the Department.

Finally, the Minister may wish to clarify why this Bill has been withheld until now. Some people might want to claim credit for themselves, saying the Bill is finally introduced by the PAP Government because of their representations and arguments for it.

The Senior Parliamentary Secretary to the Minister for Home Affairs (Mr Chin Harn Tong): Mr Speaker, Sir, I rise in support of the Charities Bill which is now before the House. My reason for supporting this Bill is that the provisions of this Bill could not have been more timely. Trade unions in Singapore have increasingly directed their attention to the plight of Singaporeans who are less fortunate than their members. Consequently, an increasing portion of every trade union's programme of activities is devoted to promoting among union members and among other workers a greater awareness of their social obligation to their less fortunate fellow citizens. The involvement of trade unions in charitable activities may take the form of either charitable and welfare work by the unions and their members or contributions and donations to existing charities.

Existing charities in Singapore seem to be well organized and properly run. There seems to be no particular need for enacting the provisions of this Bill. Yet I strongly support this Bill not because there is a need for it but because the Bill would be helpful to the charities themselves and to the people who run or support charities as well as the people whom the charities are meant to benefit. The Bill helps the charities and all these people by reinforcing among the public the feeling of assurance and confidence that whatever contributions and donations made to charities will be properly used for the purposes for which they are intended.

If I have any criticism of this Bill, it is that the Bill seems to be wholly concerned with the safe custody and proper application of funds and properties of charities. I have no quarrel with that. At the same time, I think perhaps the Bill should have dealt with the question of the collection of funds by charities. For example, clause 6 of the Bill provides that a charity registered under the Bill, unless specifically exempted, would be deemed to be as such. This obligation to register under the Bill is not tied up with any particular benefit. I should have thought that the right to solicit and receive contributions and donations as a charity should be restricted to selected organizations. The organizations should be charities registered or exempted under the Bill. There seems to be no prohibition under the Bill against any organization soliciting and receiving funds as a charity when it is not so registered or exempted. For the benefit of the public who support charities, I should think charities should be required to state clearly and prominently the fact of their registration or exemption under the Bill. Imposters or frauds can then be prosecuted more easily if they dare claim such registration or exemption.

The Bill seems to presume that charities function independently of any public support. This presumption is to be implied from the fact that under the Bill some charities do not have to account for what they do with the donations and contributions they receive from the public, even to the Commissioner of Charities. There may be good reason for so doing. But any charity which solicits and receives contributions and donations from the public should be required to inform the public who support it at least the gross sum and the net sum collected. The difference between the gross and net collections would serve to indicate to the public how much of the contributions go to the charitable purposes they support. The difference between the gross and net collections would also serve to remind the public of the need for volunteers to man the cause of charities. If charities have to depend more on paid workers, proportionately more of the contributions and donations from the public would go towards paying wages and other expenses and not the objects of the charities.

I am, therefore, of the view that this Bill should be adopted by this House since it is in the interest of the charities as well as the people who support, run or benefit from the charities to have such a Bill enacted into law.

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 Hon Sui Sen].

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