CORRUPTION (CONFISCATION OF BENEFITS) BILL

Order for Second Reading read.

The Minister for Law (Prof. S. Jayakumar): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Sir, this Bill was introduced last year as part of the Government's continued fight against corruption. It was referred to a Select Committee which recommended a few amendments after hearing representations.

The Bill, however, lapsed as a result of the dissolution of Parliament for the 1988 general elections. The present Bill before the House is a re-introduction of that Bill as amended by the Select Committee.

During the Second Reading of the Bill last year, Members will recall that we had a full debate during which I explained the rationale and outlined the provisions of the Bill. I shall therefore not go over the same ground as the provisions of the 1988 Bill, with a few exceptions, have not been amended by the Select Committee. I will only deal with a few of the changes recommended by the Select Committee and which are incorporated in the Bill which we have today.

Sir, the Bill empowers the courts to confiscate the disproportionate and unexplained assets of persons who are convicted, or deemed to be convicted, of corruption offences and to restrain the disposal of these assets before the conclusion of proceedings against such persons.

However, the Bill will not extend to persons convicted, or deemed to be convicted, of a corruption offence before the Bill becomes law and comes into force. The Select Committee had therefore amended clause 3 of the Bill to make this clear.

Another amendment is clause 5 of the Bill. It incorporates an amendment made by the Select Committee to ensure that any assets of the defendant forfeited, or previously forfeited, under section 13 of the Prevention of Corruption Act will not be included in the court's computation of the value of benefits of corruption when making a confiscation order. In other words, the quantum will not include whatever was forfeited under section 13 of the Prevention of Corruption Act.

Another substantive amendment is new clause 23 which was made by the Select Committee. It concerns confiscation proceedings against deceased absconders.

Confiscation proceedings against deceased absconder will be instituted or continued against his estate or personal representatives or his beneficiaries but the confiscation order will not be made against them personally; it will be made against the estate. Subsections (3), (4) and (5) of clause 23 have also been inserted to avoid any possible injustice which could result from the application of the presumptions in clauses 4 and 5 of the Bill.

Clause 4, subsection (4) deems a person to have benefited from corruption if he holds, or has held, any assets disproportionate to his known sources of income and which cannot be satisfactorily accounted for. Under clause 5, these disproportionate and unexplained assets constitute the benefits of corruption. But as there may be situations where the personal representatives or next-of-kin are unable to rebut the presumptions in clause 4, subsections (4) and 5, the scope of a confiscation order is now restricted to only those disproportionate and unexplained assets acquired by a deceased defendant within six years before his death. Thisperiod of six years ties in with the statutory period of limitation for commercial transactions. As in practice, banks and other financial institutions retain records for at least this length of time, the personal representatives and next-of-kin should be able to obtain the necessary proof to rebut the presumptions.

Clause 24 of the Bill, also recommended by the Select Committee, empowers the court to dispense with service of documents on absconders who cannot be found.

In conclusion, Sir, let me reiterate what I said in this House last year, that this Bill will provide us with a new and more effective weapon to combat corruption. Furthermore, the principles in the Bill are not entirely new. As hon. Members will see from the comparative table annexed to the Bill, the provisions, with a few exceptions, are modelled on the provisions of the United Kingdom Drug Trafficking Offences Act 1986 with appropriate modifications and adaptations for our purpose.

Sir, I beg to move.

Question proposed.

Mr Loh Meng See (Kampong Glam): Mr Speaker, Sir, I rise to support the Corruption (Confiscation of Benefits) Bill.

Sir, this Bill was debated in the last Parliament. The Bill was further examined and reviewed by the Select Committee. There were only three submissions made to the Select Committee. I see that there are no major changes to the original Bill, except where it was necessary to clarify and amplify the spirit and intention of the Bill.

Sir, credit must go to our Government for the pains taken to ensure that Singapore remains corrupt-free. Efforts like this on the part of the Government should be openly and expressly applauded by Singaporeans. Many may say that this is expected of the Government. But is it true in reality, in actual practice? We all read of the sad experiences of many countries. How many governments are as willing and prepared like ours to nip the problem in the bud? It requires tremendous conviction and courage to self-regulate, to keep our system clean and effective. That is why Singapore remains today a fair and just society.

Our government officials should take pride that they are able to look others in the eye and act independently and unwaveringly for making decisions that best serve the interest of Singapore and Singaporeans. Besides the Government, all Singaporeans should make very clear their stand against corruption. Singaporeans should unequivocally demonstrate their desire for a strong, clean and effective government, that we want honest and morally upright leaders and officials in government. The ability of our people to differentiate between good and bad, right and wrong, the deserving and the undeserving is critical. It is only when the Government and the people work in concert that we are able to rid corruption and dishonesty from happening in Singapore.

Sir, we hope that our economy can continue to grow and that we are able to enjoy more surpluses year after year.

Dr Lee Siew-Choh (Non-Constituency Member): Mr Speaker, Sir, I wish to give my full support also to the Government for the introduction of this Bill. Though rather late in the day, nevertheless it is better late than never.

The press frequently gives publicity to cases of corrupt practices by those holding high office who are already drawing high salaries, very handsome salaries, and by those in high society who are already fabulously rich, like bankers and tycoons. These are the people, Sir, who are insatiable in their craving for money. For them, it would appear that the more they have, the more they want.

From this, it can be seen also, Sir, that high salaries and high incomes do not necessarily make a person honest. The difficulty connected with corruption of course, Sir, is detection. As is well-known, corrupt practices are often not discovered or, if they are discovered, they may be discovered only after a long long time. Nevertheless, the provisions in the Bill should serve as a fairly strong disincentive to the would be corrupt or to those who are tempted to enrich themselves or further enrich themselves through corrupt practices to think again. Such a Bill might have been effective enough, Sir, I think to keep people like Phey Yew Kok and Teh Cheang Wan to the straight and narrow path.

I, Sir, have not had the benefit of reading the Select Committee Report because I never knew about it and I never knew about the previous arguments in this House. I am a bit puzzled, Sir, by clause 3 and the explanatory statement given at the and of the Bill. Clause 3(1) says "convicted by a court before the commencement of this Act", at line 10. In other words, this Bill will apply to all the people, except those who were convicted in a court before the commencement of this Act. That is how I understand it, Sir. But the explanatory statement says that the Bill will apply, except for those who are "deemed to have been convicted before the commencement of the proposed law". Maybe there is a difference; maybe there is not. But to my mind, when a person is deemed to be convicted, it does not necessarily mean that he has been convicted in court. Of course the Minister could explain, because I like to know whether such a clause would apply to people like Phey Yew Kok.

Sir, clause 23 says that only assets acquired within six years before death may be confiscated. As I have already indicated, Sir, corrupt practices might have been going on for more than six years without being suspected or discoverd. Today, the Income Tax Department investigates people going back to 12 years. So why cannot the same apply to cases of corrupt practices? As much of the ill-gotten gains should be returned to the State or to the people, I suggest that the figure "6" should be changed to "12" years.

Mr Chng Hee Kok (Tiong Bahru GRC): Mr Speaker, Sir, I rise to support the Bill. I have only one point to raise with the Minister. This relates to the subject of properties which are pledged to financial institutions. We are an international financial centre. A great number of properties are pledged to financial or banking institutions for raising funds. If a property pledged with the banks should be confiscated under this particular Act, I think the bank or the lending institution will be placed at a disadvantage. I do not think the Bill has adequately addressed this point. I think it will be very difficult for a lending institution to find out from the person who is taking a loan whether the property he is pledging to the bank is the subject of a possible corruption case. I do not know whether the Minister will like to look into this.

Mr Chiam See Tong (Potong Pasir): Thank you, Sir, for allowing me to join in the debate.

Sir, I rise in support of this Bill. Corruption as a way of life must never be allowed or ever to take root in Singapore. We have seen for ourselves how many third world countries, though endowed with abundant natural resources, their people remain poor and economic development could not get off the ground, all because of corruption which is rife in those countries. Sadly, Sir, the culture of corruption seems more prevalent in Asian countries than in the West. We can learn something from the West in their high standard of honesty, in particular the English-speaking countries.

Some hon Members : No

Mr Chiam See Tong: In our schools, I think we should teach our children to attain absolute honesty as a value. Ultimately, it is the education that will wipe out corruption from our society if it is possible.

Sir, I see that the Government means business. This piece of legislation really has got teeth. It even ensures that no corrupt person can benefit from his corruption even after death. It just only makes me wonder whether those people who are intent on being corrupt will or will not put their money elsewhere before they are caught. I just wonder why this law is introduced only after the death of the former Minister for National Development in December 1986, and not earlier.

Sir, the Non-Constituency Member, I think, he was afraid that the late Mr Teh Cheang Wan will get away with his benefits. But I do not think so. As I said, this piece of legislation has got teeth. And under Part IV, the definition of "absconded persons" is very wide. Clause 21 (1) says:

'For the purposes of this Act, a person shall be taken to be convicted of a corruption offence if the person absconds in connection with the corruption offence and any reference in Part II to the defendant shall include reference to such a person.'

Sir, it is a novel piece of legislation as far as I can see. There is definition of what an absconded person means. Clause 21 (2) says:

'... a person shall be taken to abscond in connection with a corruption offence if whether before or after the commencement of this Act -

(a) investigations for a corruption offence have been commenced against the person;' So once investigation starts, that person can be defined as an absconded person.

Clause 21 (2), paragraph (b)(i) says:

'the person dies before proceedings in respect of the offence were instituted, or if such proceedings were instituted, the person dies before he is convicted;' I think Teh Cheang Wan or his estate at least is caught there.

Paragraph (b)(ii) says:

'at the end of the period of 6 months from the date on which investigations referred to in paragraph (a) were commenced against him, the person cannot be found or he is not amenable to extradition proceedings. I do not know but I am just saying that if his son, Teh Kwan Seck, is also guilty of corruption, he will be caught there.

Why was this law not introduced in 1980 when Phey Yew Kok absconded, purportedly with at least $100,000? It would appear that the estate of the late Teh Cheang Wan will not escape the arms of the law but Phey Yew Kok's will, in view of the fact that a period of six years has now passed since the act of corruption committed by Phey Yew Kok.

Sir, you will remember that during the last debate on corruption, the Prime Minister said that the strongest deterrent is in public opinion which censures and condemns corrupt persons. In other words, in attitudes which make corruption so unacceptable, that the stigma of corruption cannot be washed away by serving a prison sentence. In that respect, it has the effect if only the corrupt person really cares about public opinion. But if that person really does not care, then he will be corrupt in any event.

Sir, as far as politicians are concerned, I believe the Opposition has already suggested that all politicians before they take office should declare their assets, both of themselves and members of their families. I think this will be a good practice to prevent corruption amongst politicians. But this suggestion was not taken up. You will remember that the reason given was that all PAP MPs in this House declare their assets to the Prime Minister himself and he knows exactly how much each MP is worth. But as we have seen in Teh Cheang Wan's case, somehow something went wrong somewhere. And he did commit an act of corruption up to the tune of $800,000. In fact, $1 million was given, you will remember, but $200,000 was given to the go-between.

Sir, we have also heard the NCMP say that monetary payment is not a deterrent to people who want to be corrupt in any event. High salaries may attract good men but certainly will not prevent corruption. I think we should follow the American style and get all politicians to declare their assets and members of their families' assets before they take office. And from time to time, they can be monitored. I think that is a very good suggestion. I hope the Minister for Law will comment on that.

Prof. Jayakumar: Sir, I thank the hon. Members for their support of the Bill and I will deal with some of the points which have been raised.

First, Dr Lee Siew-Choh sought clarification on clause 3 and the explanatory statement. He could not understand the reference "deemed to have been convicted". In order to explain that, I must first explain that there are provisions in the Bill to deal with confiscation of unexplained and disproportionate assets of persons who have absconded or persons who have died after investigations have commenced. And the provisions which Mr Chiam referred to lay down certain conditions which, if fulfilled, would lead to a presumption as set out in clause 21, "a person shall be taken to be convicted" in those circumstances. That is how you have a reference in the explanatory statement to "deemed to have been convicted".

Let me explain clause 3. Members will recall that last year in the House as well as in the press and also in the representations made to the Select Committee, considerable concern was expressed over what was felt to be retrospective application of provisions. This has been taken into account to some extent by the Select Committee in clause 3. The effect of clause 3 is that the provisions of this Bill will apply to corruption offences which take place before or after the commencement of this Act. In other words, investigations could have started, the offence could have been committed before the coming into operation of the Act, provided the person has not been convicted before the coming into operation of the Act. If the person has been convicted and because of the presumption provision of "deemed to have been convicted", then that retrospectivity does not reach a person who has been convicted before the coming into operation of this Act. But if the person has not been convicted, if investigations started before the coming into operation of the Act, and the conviction has not taken place yet, then it will apply. That is how the Select Committee has dealt with this situation.

Dr Lee Siew-Choh: Sir, can the Minister say whether this applies to Phey Yew Kok?

Prof. Jayakumar: The question as to whether this applies to Phey Yew Kok is obviously a legal question which the CPIB will have to take up with the Attorney-General's Chambers after this Act comes into force. But if I may say so here, Mr Chiam was wrong in thinking that the 6-year cut-off period applies to Mr Phey Yew Kok because my reading of that clause 23 is a specific reference to persons who have died. In other words, the effect of death on proceedings is a provision which applies to persons who have died.

Mr Chiam See Tong: Sir, may I just clarify? Is there not also in law the presumption of death if after seven years, nothing is known of a person from people who should know of his whereabouts?

Prof. Jayakumar: Sir, we are talking about this Act. Under the provisions of this Act, his earlier assertion that the 6-year period applies to Mr Phey Yew Kok is not correct. Whether or not there are other principles of law, as I said, is a legal question which will obviously be taken up.

Mr Chng Hee Kok asked about safeguards for banks or financial institutions who have, I guess, an encumbrance over a certain property. I would like to assure him that this matter is taken care of in the Bill. I would like to refer him specifically to clause 8 subsection (3)(a)(ii) where in computing the value of property (other than cash) any other person who holds an interest in the property, it shall be the market value less the amount required to discharge any encumbrance on the interest. I am advised by the draftsman that that provision would take care of that. I may also refer him to clause 16(4) which says that the powers exercised by the court shall be exercised with a view to allowing any person other than the defendant or the recipient of any gift to retain or recover the value of any property held by him. So a combination of clause 8 (3)(a)(ii) and clause 16(4), I believe, would meet the Member's concern.

On Mr Chiam's point about Ministers being required to give an undertaking, this is not a new point. It has been raised in this House before by Mr Jeyaretnam and Mr Chiam and it has been fully discussed and answered by the Prime Minister on two occasions, I recall, in March 1985 and January 1987. And as he said, the Prime Minister made it clear that every Minister has to file a declaration of his assets with him and explain the reasons because when an allegation is made the authencity or veracity of that document is the basis for the investigation. As to making the declaration public, it was also touched on by the Prime Minister who explained the problems involved as to making it public-the question of privacy and how it would make the problem of getting good men to stand as candidates even more difficult. But if Mr Chiam is serious and he wants to pursue this, then by all means we can have a full debate on it. He can file a motion and we can debate the matter. But before he does so, I think he should refresh his memory on the debates which have already taken place in this House.

He mentioned that this was a novel Bill. It is novel in so far as it is made applicable to corruption. But the principle that a person must not enjoy his ill-gotten gains is to be found in the legislation of quite a number of countries in other contexts, principally seizure of assets in drug trafficking, and the main Bill on which these provisions are based is the Drug Trafficking Bill in the United Kingdom and to some extent the Proceeds of Crime Act in Australia.

I believe I have answered the main questions. The fact that this Bill has come after Mr Teh Cheang Wan's death should not give the impression that nothing is done about Mr Teh Cheang Wan. As Members know, civil proceedings have been instituted by the Attorney-General against the estate of Mr Teh Cheang Wan for the recovery of the total sum of $1 million and these proceedings are alive and pending. But as explained last year in this House, because of the principle of retroactivity, the provisions of this Bill cannot be used against Mr Teh Cheang Wan. Notwithstanding that, the provisions in the existing law are enough basis for us to proceed against Mr Teh Cheang Wan's estate.

Dr Lee Siew-Choh: Mr Speaker, Sir, the Minister said something about the CPIB taking up wih the Attorney-General's Chambers for clarification of the reading of the Bill. Since there is some doubt at the present time when the Bill is being introduced, why can't the Minister now ensure that there be clarity and that there be no doubts whatsoever as to what our intentions really are?

Prof. Jayakumar: Well, then there will be no job for lawyers in the first place! But this is a Bill on principles. Applications of the Bill to specific cases, present or future, is a separate matter to be decided on the facts, the circumstances, on the evidence available of a particular case. I do not think that this House is the proper place to prejudge any such questions.

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. [Prof. S. Jayakumar].

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

Mr Speaker: Order. I suspend the sitting and will take the Chair again at 3.40 pm.

Sitting accordingly suspended at 2.54 pm until 3.40 pm. Sitting resumed at 3.40 pm