ARCHITECTS BILL (As reported from Select Committee)

Order for Third Reading read.

The Minister for National Development (Mr S. Dhanabalan): Mr Speaker, Sir, I am afraid I have to play the Philistine and bring you down from the stratosphere of high art to the world of nuts and bolts.

Mr Speaker, Sir, I beg to move, "That the Bill be now read a Third time."

Sir, when I moved the Second Reading of this Bill before the House in March this year, it was resolved that the Bill be committed to a Select Committee to give an opportunity to professional groups and individuals in the construction industry to present their views on the new provisions in the Bill that affect them. Two other related Bills, namely the Professional Engineers Bill and the Land Surveyors Bill, were also committed to the same Select Committee.

A total of 15 written representations on the three Bills were received from various professional groups and individuals in the construction industry. The Committee studied all the representations and also heard oral evidence from six of the representors whose views constituted a good cross-section of the representations submitted. Many of the representors supported the spirit and intention of the Bills. The issues raised by them were mainly centred on the particular provisions of specific clauses. A number of valid points were made by some of the representors.

The Committee has therefore recommended some amendments to the Bills. These amendments together with the reasons are given in detail in the Report of the Select Committee which has been circulated to Members of the House. I will now highlight the more significant amendments which have been incorporated in the reprint of the Architects Bill now before the House.

Multi-Discipline and Corporate Practice

Many of the points raised by the representors concern the provisions in the Bill for regulating multi-discipline and corporate practice by registered architects and allied professionals. Several representors were concerned that clause 20 of the ArchitectsBill would allow a licensed corporation with non-architects as directors and shareholders to supply architectural services. It was felt that this may compromise the standard of architectural services provided if the manager in charge is merely an employee of the corporation and works under the direction and control of non-architect directors and shareholders. The Committee accepted that this is a valid concern and has therefore recommended that clauses 20 and 21 of the Bill be amended to ensure that the control and management of the business of a licensed corporation or partnership, insofar as it relates to the supply of architectural services, shall be in the hands of a share-owning director or partner, who is a registered architect with a valid practising certificate, and ordinarily resident in Singapore.

A representor also pointed out that the Bill as drafted could allow non-professionals to hold more than the permitted proportion of one-third of the shares in a licensed corporation through nominee shareholders who are either registered architects or allied professionals; in other words, the professionals fronting for the non-professionals. Clauses 20 and 21 of the Bill are now amended to ensure that at least two-thirds of the shares in a licensed corporation with limited liability shall be beneficially owned by and registered in the names of registered architects or allied professionals or both.

Professional Liability Insurance

The Bill requires only licensed corporations formed with limited liability to be insured against professional liability insurance (PLI). However, the Committee felt that enabling provisions should be inserted in the Bill to allow the Board of Architects to introduce compulsory PLI stage by stage in respect of other forms of practice, including individual practitioners. This will allow the Board to respond to the needs of the industry as they arise. Clause 36 of the Bill has therefore been amended to empower the Board of Architects to make rules requiring licensed corporations with unlimited liability, licensed partnerships, ordinaryarchitectural partnerships as well as individual practising architects to take out and maintain compulsory professional liability insurance. The Board is also empowered to make rules prescribing the terms and conditions of professional liability insurance such as the minimum amount of cover required. There is no intention for the Board to introduce such PLI in the immediate future.

Government Architects

Clauses 15(6) and 17(2) of the previous draft Bill, which were retained from the existing Architects Act, exempt Government architects from paying the prescribed registration fees. These two sub-clauses have now been deleted to avoid the imputation that the Bill treats Government professionals more favourably than private sector professionals.

Exempt Bodies and Persons

The Bill has no intention to preclude any public authorities that are empowered to supply architectural services under any written law, such as the HDB, from continuing to supply such services in accordance with the provisions of such law. Therefore, clause 3 has been amended to make it clear that the Bill does not seek to license any public authority which supplies architectural services pursuant to any written law in Singapore. In other words, bodies like HDB do not have to apply for a licence because they are allowed to function and perform what they are doing under written law.

Miscellaneous Amendments

The Bill introduces the system of practising certificates to replace the present system of annual registration for practising architects. This makes it necessary to amend other existing Acts, such as the Building Control Act, which refer only to registration as a pre-requisite for engaging in architectural work. For this purpose, clause 47 has been amended to provide for these amendments to avoid having to introduce another Bill to make direct amendments to other related laws. The other amendments to the Bill are consequential amendments or amendments of a technical or drafting nature.

Mr Speaker, Sir, the Architects Bill marks an important milestone for the course of the architectural profession in Singapore. When enacted, it will bring the professional practice of architects and allied professionals up to date with the tremendous progress made by the construction industry over the last two decades.

In conclusion, I would like to express my appreciation to the many people who have contributed to the preparation and drafting of this comprehensive piece of legislation.

Sir, I beg to move.

Question proposed.

Dr Tan Cheng Bock (Ayer Rajah): Mr Speaker, Sir, I rise to support the Bill.

Mr Speaker, in the Select Committee hearings, a number of professional groups and individuals were concerned over the provisions relating to the control and management of the multi-discipline corporate firms. Under the original Architects Bill, a licensed corporation whose shareholders and directors consisting entirely of non-architects could provide architectural services.

In the Select Committee deliberations, the architects held a very strong view that such multi-discipline corporate practice must, therefore, project to the public a clear picture of the character of the practice. In other words, the practice must make clear to the unsophisticated clients that it offers primarily architectural services, or engineering services, or land surveying services. Thus, if the corporation is architectural-biased and offering engineering and land surveying services secondarily, it should be made known of its architectural bias. Similarly, for the engineers and land surveyors. Therefore, they suggested an amendment to clause 20(1)(d) to require registered architects to hold a minimum of 51% shares in the corporation in a multi-discipline corporate practice with architectural bias. They want this minimum safeguard to ensure that the architect will play a significant and influential role in the control of the supply of architectural services with no dilution of professional standards. Similarly, engineers should hold 51% of the shares in the corporation that is more engineering-biased, and likewise for the land surveyors.

In the Select Committee hearings, there were a lot of exchanges between the Singapore Institute of Architects' representors and the Select Committee Members. It is all in the Report and even, at one stage, the Minister was quoted as saying: "I do not think we can resolve this problem." As the Select Committee has finally made this amendment, may I beg your indulgence, Mr Speaker, Sir, to request the Minister, in the interest of unsophisticated clients, why the Select Committee finally recommended that the Architects Bill be amended to allow licensed corporations to provide architectural services only under the control and management of an executive shareholding director who is a practising architect resident in Singapore.

Mr Dhanabalan: I thank the Member for his support for the Bill. Sir, as he has mentioned, the question of whether the engineers or architects should have control of a multi-discipline corporation was brought up before the Select Committee and some architects felt very strongly that the firm that offers architectural services should be controlled by architects. In other words, at least 51% should be owned by architects and that there should be a clear picture of the character of the firm.

We debated this at some length and some of the main reasons are given in the Select Committee's Report. But I would just like to repeat or highlight some of the main considerations. Sir, if a group of architects wants to project itself as primarily architects, they can own the firm 100%. It is up to them to decide. There is nothing in the law to say that a multi-discipline corporation must be owned equally by the various professions. So it can be owned 60% by architects, 10% by engineers, 10% by land surveyors and the other 20% by others. It is entirely up to the architects to determine. There is nothing in the law which requires them to distribute the shares equally.

On the other hand, if the shares are equally distributed, or widely distributed, and there is no clear dominant shareholder, then the character of the firm would be determined by the kind of work it does and how the public perceives the firm. If you have a firm with I.M. Pei, an architect, as a shareholder, and he owns only 5% of the firm, people who want good designs would go to that firm even though he owns only 5% of the firm. They are not going to look at the shareholding to see how many shares he owns. Similarly, someone who wants a special steel structure and there is a firm with T.Y. Lin as a shareholder, and he owns only 2%, he will still go to him. So the public perception of a firm would be determined by the competence and reputation of the professionals involved and not by the shareholding. The nature and composition of the firm's business may change from time to time. Today, architecture may be the main source of its income, next year, it could be engineering. So what happens? Does the firm restructure? Or they may bring in a new partner, who may be very well known in the engineering world, and people get attracted to the firm because he is a well-known engineer. Do they restructure the firm? We therefore decided to leave it silent and let the firm's reputation, image, perception be determined by market forces and by people's perception of the firm.

On the second point: why did we change the law? As originally drafted, a firm couldoffer architectural services as long as it was under the supervision of an architect. But that architect could be merely an employee. And the point was made that an employee would be under more control and he would be less independent than a shareholding director. Therefore, we amended the Bill to require that if a firm offers architectural services, it must be under the supervision of a shareholding director who is an architect. Similarly, if a firm offers engineering services, it must be under thesupervision of an engineer who is a shareholding director.

Question put, and agreed to.

Bill accordingly read a Third time and passed.