COMPANIES WITH ENVIRONMENTAL AUDIT (Tax rebates)

Dr Kanwaljit Soin asked the Minister for Finance whether he will grant tax rebates to companies that are willing to have an environmental audit so that we move towards sustainable development for the country.

Dr Richard Hu Tsu Tau: Mr Speaker, Sir, an environmental audit is an internal management tool for a company to carry out a systematic and objective evaluation of how well it is performing in terms of helping to safeguard the environment. Environmental audits can yield economic benefits to the company. More and more companies are finding that being environmentally-responsible can help improve their public image and assist in the marketing of their products. More importantly, such audits can help achieve greater energy efficiency and waste minimisation and hence result in cost savings for the companies concerned.

As environmental audits are internal management tools which companies can benefit from, it will not be necessary to provide tax incentives for companies to carry out such audits.

Dr Kanwaljit Soin: Sir, is the Minister aware that the number of firms which have been prosecuted for flouting environmental regulations has gone up three-fold from 1992 to 1993? That is the first supplementary question. The second supplementary question is: Is the Minister aware that the Ministry of the Environment is moving away from enforcement regulation towards self-policing regulation for the firms to follow environmental criteria? In the light of this, would the Minister consider that an added incentive for firms to be self-policing would be to give some sort of tax rebate to encourage them to be environmentally-friendly?

Dr Richard Hu Tsu Tau: The fact that more prosecutions have been made by the Ministry of the Environment means that vigilance in ensuring that companies observe environmental rules has been heightened. Notwithstanding that, I am still not convinced that we need tax incentives. The National Council for the Environment and the Singapore Manufacturers Association have been organising seminars and workshops to teach company managers how to install environmental audit systems and the methodology involved and a handbook covering these items will be issued. Such tools are much more effective in helping companies move in this area rather than tax incentives. I do not think we want to use tax incentives as a crutch for everything in Singapore.

Dr Kanwaljit Soin: Does the Minister agree that to be environmentally-friendly is going to be very important for the sustainable development of Singapore? Besides giving seminars to these people, would the Minister not agree that a tax rebate would be an added incentive to change their practices? Otherwise, would the Minister have some other means which he could suggest to make firms more environmentally-conscious?

Dr Richard Hu Tsu Tau: Tax incentive is an added incentive for everything. I think we need to control this. I am not aware that environmental problems are a major issue in Singapore. I think the Environment Ministry and the companies themselves have, by and large, been good in maintaining careful standards of environmental pollution, whether it is air, oil or smoke emissions. Companies themselves are aware that proper environmental audits can yield net gains for them and increasing awareness, training and making information available should be more than adequate to fulfil our objectives. Environmental pollution is not a major issue in Singapore as far as I am aware.

Dr Kanwaljit Soin: Sir, the Minister must be aware that there are 3,500 firms in Singapore that generate liquid waste. So I think the problem is there.

Mr Speaker: What is your question?

Dr Kanwaljit Soin: The question is: does the Minister think that there is no problem in spite of these statistics?

Dr Richard Hu Tsu Tau: All companies will generate waste of some sort or other in the manufacturing process. You cannot eliminate it altogether. It is sensible for companies to try and minimise waste and, particularly, they do not pollute the environment. I still do not believe that we have a major issue here.