ELECTRONIC TRANSACTIONS BILL

Order for Second Reading read.

The Minister for Trade and Industry (Mr Lee Yock Suan): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The emergence of electronic commerce, or e-commerce for short, is transforming the way businesses are conducted globally. The possibilities and opportunities are limitless. Leading Internet research companies such as ActivMedia and IDC have projected worldwide Internet sales to reach the order of US$200-300 billion by the year 2001. There is little doubt that e-commerce will become an important engine of growth for the global economy in the next millennium.

We want to be plugged into this global development and position Singapore as an international e-commerce hub. The aim is for Singapore to play the role of a secure and trusted node where e-commerce transactions from the region and around the world are processed. To do so, a pre-requisite is to provide a conducive legal and policy framework. We need to create an environment of trust, predictability and certainty in the Singapore system, with good arbitration and good jurisdiction, for e-commerce to flourish.

The advent of e-commerce and the increasing use of the digital medium have created some novel legal issues where there are yet no clear answers. In the physical world today, there are requirements for documents to be in writing and for hand-written signatures. Such requirements need to be translated into the electronic realm. For communication and transactions occurring over a faceless network, there is a need for reliable methods to authenticate a person's identity and to ensure the integrity of the electronically transmitted documents. The Electronic Transactions Bill aims to address these important issues and to create the legal framework for e-commerce transactions in Singapore.

Mr Speaker, Sir, in drafting the Electronic Transactions Bill, the following guiding principles were adopted:

(a) The need to conform to international standards and international models in order to be integrated with the global e-commerce framework;

(b) The need to avoid over regulation;

(c) The need to be flexible and technologically neutral to adapt quickly to a fluid global environment; and

(d) The need for transparency and predictability in our laws.

Broadly, the Bill seeks to do the following:

(a) Enact a Commercial Code to support e-commerce transactions;

(b) Provide for a Public Key Infrastructure;

(c) Enable Electronic Applications and Licences for the Public Sector; and

(d) Clarify Network Service Providers' liability for third party content.

I will describe each of these four objectives in turn.

Commercial Code for E-commerce Transactions

To clearly define the rights and obligations of transacting parties, we need a commercial code to support e-commerce transactions. The first objective of the Bill is thus to set out a commercial code that combines the best features of international models such as the United Nations Commission on International Trade Law's Model Law on Electronic Commerce and the Illinois Electronic Commerce Security Act. The Bill contains provisions dealing with how a contract can be formed electronically, and the status and use of electronic signatures and records.

Electronic Contracts

First, on electronic contracts in general. While rules on the formation of contracts are clear in the physical world, there are significant ambiguities in the electronic world. There is therefore a need to enact legislative provisions to clarify the rules of formation of electronic contracts. Part IV of the Bill clarifies that contracts can be made electronically. It also deals with the issues of time and place of sending and receipt of electronic messages.

Electronic Records and Signatures

Secondly, on electronic records and signatures. Part II of the Bill clarifies that electronic signatures have the same legal binding effect as that of written signatures.

Transactions and submissions that are currently done and signed in written form can also be done in electronic form. Nevertheless, in the generating and processing of electronic records, Parts II and IV of the Bill can be varied by agreement between the parties to a transaction.

As e-commerce is still in an early stage of development, we foresee a period of time before the international scene settles down. As such, the provisions of the Bill should not at this time go so far as to require recognition of electronic signatures and documents in place of physical forms entirely. There are certain classes of documents or transactions that may not be ready for such an immediate change. Hence, insofar as Part II and Part IV of the Bill are concerned, it is provided in clause 4 that in certain matters such as wills and documents of title, the electronic records, signatures and contract provisions do not apply. This does not, however, prevent the courts from recognising the use of electronic documents in these matters on a case-by-case basis. Eventually, when public confidence in electronic transactions grows, the Bill may be widened to include such documents.

Secure Electronic Records and Signatures

Thirdly, on secure electronic records and signatures. We recognise that in the digital world, there is no face-to-face interaction. As a result, issues concerning identity, authenticity and integrity arise. One solution that has been gaining popular support is the digital signature.

A digital signature, when affixed to an electronic document, has two essential properties. It confirms that a document has not been tampered with since the time the signature was fixed. It also identifies the person who fixed the signature. Traditional hand-written signatures do not perform these functions with the same degree of certainty. It is therefore justifiable to afford some evidentiary presumptions on digital signatures and the documents on which they are affixed, if these signatures are created in accordance with a secure procedure. The Bill provides for this legal effect. The use of such signatures will supplement the electronic contract rules that I have described earlier.

Part V of the Bill provides for the circumstances and conditions under which electronic records and signatures are to be treated as secure. Parts VI and VII of the Bill go beyond electronic signatures to describe the legal effect of digital signatures and the general duties relating to them.

Public Key Infrastructure

Mr Speaker, Sir, I will now move on to the second objective of the Bill which is to provide for a Public Key Infrastructure.

The generation and verification of digital signatures are done through cryptographic algorithms using a pair of private and public keys unique to an individual. A Public Key Infrastructure, consisting of Certification Authorities as trusted third parties, needs to be set up to enable public keys to be issued in a reliable manner. Singapore has been developing such an infrastructure.

Under this infrastructure, the Certification Authority (CA), certifies that a given public key is associated with a given individual. A CA may perform a face-to-face verification of the individual before such a certification is given, in the form of a digital certificate. This certificate can subsequently be used to confirm the public key of an individual, and verify the signature that is generated by the individual. Netrust is the first CA in Singapore to issue keys for digital signatures.

The CA, being in a position of trust, needs to be subject to some standards and controls, so that there will be public confidence in the services it offers. These are set out in the general duties of the CAs prescribed in Part VIII of the Bill

There are also corresponding duties on the subscribers of such CA services. These are set out in Part IX of the Bill. These duties will not create criminal offences, but will form the basis on which courts may attach civil liabilities. CA Licensing Scheme and Controller of CA

A voluntary licensing scheme is proposed in the Bill. Only licensed and approved CAs will enjoy the benefits of the evidentiary presumptions that I described earlier for signatures generated from the certificates issued. The exception to this is where parties agree to be bound by signatures created by a commercially reasonable procedure.

Closed networks may continue to use unlicensed CAs for their own purposes. They may, however, also be licensed to gain the full benefit of the law.

The Bill provides in clause 41 for the appointment of a Controller of CAs. The Controller will, amongst other duties, license, certify, monitor and oversee the activities of CAs.

Clause 42 further provides for regulations to be made concerning the licensing and regulation of CAs and when a digital signature qualifies as a secure electronic signature. The Bill provides for different consequences in situations where a CA is licensed as opposed to one where the CA is not.

Clause 45 of the Bill also provides for licensed CAs to enjoy the limitation of liability for any loss caused by the reliance on a false or forged digital signature of a subscriber, as long as the CA has complied with the requirements under the Act. Foreign CAs recognised by the Controller will enjoy similar benefits. This is known in the industry as "cross-certification" and will facilitate cross-boundary e-commerce.

Electronic Applications and Licences for the Public Sector

Mr Speaker, Sir, allow me to now go on to the third objective of the Bill, which is to provide for the acceptance of electronic documents by the public sector.

To promote the use of the electronic medium in the public sector, the Bill will contain an omnibus provision in Part XI for Government departments and statutory boards to accept electronic filing without having to amend their respective Acts. It also allows public bodies to issue permits and licences electronically. It is an "opt-in" provision, so that those agencies that are not yet ready to go "paperless" are not compelled to do so. However, the Government is committed to making available counter services in the electronic medium as far as possible and where it is cost-effective.

Clause 63 of the Bill makes a related amendment to the Interpretation Act (Cap. 1) to allow regulations on the manner and method of electronic filing and issuance to be made by these public bodies under their respective Acts. The amendments to the definition of "Gazette" and "Government Gazette" in the Interpretation Act is to enable the Government to publish the Gazette electronically on the Internet, in addition to the hard copies printed by the Government Printers. The Government will take advantage of Internet technology to enable the Gazette to be published electronically on a daily basis instead of only once a week. Details of the plans are currently being worked out and will be announced in due course by MITA.

Network Providers' Liability

Mr Speaker, Sir, I will now touch on the final objective of the Bill regarding Network Providers' Liability.

It is essential for the growth of a national information infrastructure that we manage the exposure of network service providers to the risks of liabilities for third party content. For example, an Internet Service Provider (ISP) should not be held liable for objectionable contents or defamatory statements on the thousands of web sites that are accessed daily, and over which the ISP has no control.

Clause 10 of Part III of the Bill provides that a network service provider is not subject to criminal or civil liability for third party material for which the provider merely provides access. Where network service providers engage in activities which are indistinguishable from those of common carriers such as telephone companies and post offices, they should be given the assurance that they will be treated in the same way in respect of such activities. The clause, however, will not affect the obligations of a network service provider under any licensing or other regulatory regime established under the law, eg, Singapore Broadcasting Authority's class licences. It will also not affect any obligation founded on contract or any obligation imposed under any written law or by a court to remove, block or deny access to any material.

Network service providers will of course continue to be liable for their own content, or third party content that they adopt or approve of.

Conclusion

As this Bill will have a significant impact on the growth of electronic commerce in Singapore, the views of the public and of experts in this field have been solicited when drafting the Bill. Ministries, statutory boards, academics from the NUS Law Faculty, as well as practising lawyers who are known for their expertise in technology law were consulted. Their valuable comments and inputs have, wherever appropriate, been incorporated into the final version of the Bill now before the House. The National Computer Board also conducted a Round Table Session for chief executives from the industry to brief them on the salient features of the Bill and to gather their feedback. In general, the feedback has been favourable and supportive of the new legal framework.

In conclusion, Mr. Speaker, Sir, this Bill sets the basic legislative framework for e-commerce and electronic transactions. It removes existing legal impediments and instills confidence in businesses and individuals to engage in e-commerce. This Bill will bring Singapore to the forefront of international e-commerce developments. It will help us achieve our vision of turning Singapore into an international e-commerce hub.

Sir, I beg to move.

Question proposed.

Mr Leong Horn Kee: Mr Speaker, Sir, I wish to express my support for this Bill.

The introduction of this Bill is both opportune and necessary. It is opportune because Singapore has aimed to be wired up nation-wide under the Singapore One programme as a fully integrated and networked nation, striving to be one of the most progressive nations in the area of information technology in the 21st century.

It is necessary because with the advent of widespread use of the world-wide web and the Internet for electronic commerce, there will be a need to set rules and regulations to protect both the providers and users of goods and services offered on the Internet. The future market place is in the Internet or the so-called cyberspace. This cyberspace market is a burgeoning market where the volume and value of transactions will explode. As the Minister has stated, by the year 2001, it is expected to grow to S$200 billion. Hence, it is imperative that there should be proper rules to govern this market.

Sir, I have three main points to raise with regard to this Bill. First, on publicity programme. This concept of electronic commerce is still very new to many people. Most are not aware of the full implications; how it works; what are the risks and responsibilities; what is an electronic signature; and how do the certification authorities such as Netrust operate. Hence, I feel that the Government should undertake a comprehensive publicity programme to educate the public on the entire concept and the system.

Second, on the protection of the users. I wish to ask the Minister whether the present level of controls and penalties are adequate to protect the users, particularly the small consumers. Electronic commerce is very vulnerable to computer frauds. When a hacker gains access into a computer, he can get the account numbers and signature codes of users. Thereafter, he can withdraw large sums of money or use another person's account and electronic signature to purchase goods in the cyberspace market. Similarly, a user of a service has to provide his account number and signature code. Hence, there is an inherent risk that others can get unauthorised access, and use the information for fraudulent purposes.

Where the sums of money involved in computer frauds can be large, I wish to ask the Minister whether the present level of penalties proposed in the Bill is adequate to serve as a deterrent.

My third point is on foreign participation. I wish to ask the Minister whether foreign-based individuals and companies can register with the certification authorities and participate in the electronic commerce in Singapore. On the one hand, if we limit the participants to just Singapore-based individuals and companies, we are also limiting the size and scope of the market. On the other hand, if we were to extend the coverage to outside Singapore, there are many legal and physical problems. Legally, do our laws have extra-territorial coverage? How do we police and exercise controls? How do we handle claims and suits? Do we have the capacity to deal with the volume?

These are the many issues and complications of the cyberspace. Essentially, the question is: who has the rights, the means and the clout to become the "government" in cyberspace where there are no physical boundaries.

Sir, I hope the Minister will enlighten us on these questions.

Mrs Lim Hwee Hua (Marine Parade): Mr Speaker, Sir, given the increasingly large role that technology plays in our everyday lives, the introduction of this Bill is timely. The Bill provides a comprehensive framework for electronic transactions in general and focuses on electronic commerce. An important feature of this Bill is that electronic transactions will be given their due legal effect, and a transaction conducted electronically, for example, over the Internet, is now deemed to be a valid and enforceable contract, as provided for in clause 11. However, I would like the Minister to clarify the following issues, especially those pertaining to transactions involving the individual as an end consumer who is a party to an electronic transaction.

Scope of coverage, especially cross border transactions

The Minister seems to imply that not all cross border transactions involving a party outside Singapore would fall within this legal framework. If so, would the public know how to differentiate between the transactions that are and those that are not covered? For example, when the Act comes into effect, will an individual, who runs into a problem with his purchase from a company overseas, have any legal recourse? Will he know that, even before he puts his order across? On a broader scale, will there be enough public education on matters that are excluded, as elaborated in clause 4, for example, the creation or execution of a will, or any contract for the sale of immovable property? This is to ensure that the public will not be misled by fraudulent representations. The importance of a comprehensive public education programme cannot be overstated.

Understanding the legality of an electronic transaction

When electronic commerce takes on greater significance, more individuals are likely to transact through the Internet. Doing one's shopping over the Net would soon become common place. However, will there be enough education to help ensure that the public understands the legality of such electronic transactions? That, once the transaction has been completed, neither the purchaser nor the supplier may change their minds and rescind from the contract nor vary the terms unilaterally. Even though one may never have met the other party with whom one is signing this contract, the clicking of the mouse or the keying in of the credit card details and the necessary digital signatures will have the same effect as putting one's pen to paper. This brings to mind the question: which is the appropriate body to turn to when one has enquiries or complaints with regards to electronic transactions? Does one turn to CASE or the Small Claims Tribunal or the Certification Authorities for answers to one's questions?

Responsibility of a subscriber

The public must note that once they have registered themselves as subscribers, they have a legal duty under clause 39 "to exercise reasonable care to retain control of the private key and prevent its disclosure to a person not authorised to create the subscriber's digital signature." As no specific penalty was prescribed, it would appear that contravention of this will render them liable under clause 56 to a maximum fine of $20,000 or a maximum of six months' imprisonment or both. For electronic commerce to be truly successful and effective, it would appear that the more users, and therefore subscribers, we have, the better. Understandably, there do not appear to be stringent statutory nor other specific requirements to be met before one can be registered as a subscriber. This brings me back to the point of education again.

Will subscribers understand the obligations upon registration or the significance of digital signatures? Or will this result in unwanted transactions by a family member who has been entrusted with the subscriber's private key?

Sir, apart from the above points raised, the introduction of the Bill also presents some important economic considerations. Now that the Government has lent its full support to electronic commerce, what impact will this have on our local economy, particularly the small and medium businesses? Does this mean that more business will be diverted to those who have the presence on their net, or who can facilitate electronic transactions or even to suppliers overseas? There is no looking back now. On the other hand, the signal is not for businesses to jump on to the Internet band wagon. How best can we prepare companies, especially the small and medium businesses, for such new but inevitable developments?

With the advent of electronic commerce, middlemen of any size will potentially be squeezed out. They may then be forced to concentrate on the one area which they triumph over the electronic medium, ie, the human factor. You cannot put a friendly human touch across electronically. In contrast to a computer screen, non-electronic services can provide a personalised touch, a friendly smile and a generally feel-good sentiment.

In conclusion, Sir, the introduction of this Bill is timely, as it anticipates the legal issues that may arise with an increasing undertaking of electronic commerce. However, a great deal of attention must be paid to educating the public and business community on the effects and economic implications of such transactions.

Dr Ho Tat Kin (Bishan-Toa Payoh): Sir, public communication networks such as Intenet are becoming vital business tools for organisations that wish to implement electronic transactions. A key factor which has prevented many organisations from engaging in this type of services is security. Unsecured data transmitted over an untrusted public network is vulnerable. Data is subject to interception, vandalism, mutation and unauthorized access to an organisation's network by unknown, unauthorised and sometimes hostile users.

To enable companies to take advantage of business opportunities created by the Internet while avoiding the risks, there must be technology to provide secure transactions and there must be the legal framework to ensure that electronic transactions are safe and valid.

The technology to provide secure electronic transactions is readily available now. In Singapore, Internet banking has already been piloted or implemented in several banks. The Government has led the push for Internet commerce by introducing several initiatives such as Singapore One, coupled with the availability of key technologies such as secure electronic transaction protocol, Internet commerce is poised to take off rapidly in Singapore in the next few years.

An IDC Asia-Pacific Report recently indicated that in Singapore the number of users accessing the Net will grow from 62,529 at year-end 1996 to 1.3 million by year-end 2001. The percentage of users buying goods and services on the web will grow significantly from 8.1% in December 1996 to 34.3% by December 2001. The same report also forecasts the amount of electronic commerce in Singapore to grow dramatically from US$1.07 million at year-end 1996 to US$883 million by year-end 2001. Other countries are also moving on to electronic commerce fast. Japan is giving a big push for electronic commerce. Their Ministry of Trade and Industry (MITI) has since 1995 committed an equivalent of S$486 million as seed venture capital to finance 50 electronic commerce projects. The Minister has also given an indication of electronic commerce in the United States. The electronic commerce in the US is expected to exceed US$500 billion within this year and is expected to increase by US$70 billion per year through the end of the decade.

The emergence of electronic commerce is transforming the way business is conducted globally. The possibilities for new business opportunities are practically limitless. Singapore has always been in the forefront of IT development and usage in this region. With our IT infrastructure, we are able to position ourselves as an international electronic commerce hub. We have the capability to play the role of a secure and trusted node where electronic commerce transactions from anywhere can be processed. To do so, we need to provide a conducive legal and policy framework to facilitate the development of electronic commerce. Sir, we have that environment now. The Bill before the House today seeks to provide the legal regulatory and enforcement framework. It is a timely Bill with a tremendous impact on our economic development. I support this Bill.

Sir, business in cyberspace is a whole new faceless and intangible world fraught with risks and uncertainties. This Bill defines the rights and obligations of transacting parties. But how does this Bill provide the protection of the different players in an electronic transaction? Then there is the question of tax which is silent in this Bill. Different countries have different views on the question of tax. On the one hand, the European Community is concerned that the Internet will create a black market that cannot be taxed, which will mean a loss of revenue to the government. The United States, however, advocates that no new tax be applied to Internet commerce. Sir, is our 3% GST applicable to electronic transactions?

Sir, the development of electronic commerce in Singapore must have consistency with international regime. International cooperation and inter-operability are necessary. Will the certification authorities specified in this Bill be globally inter-operable? Perhaps the area where electronic commerce causes the greatest problem is jurisdiction of tax. Cyberspace is a borderless and yet cross border transactions will become more popular. Identifying which country has jurisdiction to tax the proceeds from the new form of commerce is a significant and difficult issue. How does the Bill apply to cross border transactions, tax and legal issues, when there is a lack of geography in determining the place of formation and performance of contracts?

Studies in the United States have shown that electronic commerce brings big and small organisations to an even footing as the entry barrier to a presence in the virtual shopping mall is very low. There are some 91,000 small and medium enterprises in Singapore employing more than half of the country's workforce. They will benefit most from electronic commerce. But SMEs are today predominantly concerned with the more immediate and fundamental issues like staying in business, trying to make a profit, and overcoming competition. SMEs generally do not perceive that electronic commerce can substantially assist them with these primary concerns.

The level of appreciation of SMEs today on the potentials for electronic commerce to provide competitive advantage, encourage and support export opportunities, is still relatively low. There is an urgent need for Government and their agencies to set up programmes to assist SMEs in coming to terms with electronic commerce more quickly. This can be done through extensive education and training. NCB perhaps could establish an electronic commerce resource centre which will help SMEs to accelerate adoption and implementation of relevant electronic commerce technologies for business benefits. The Government can help SMEs to avoid uncoordinated development of underlying technology which could cause incompatibility resulting in problems of integration in the global market. Assistance in the form of funding could be provided for projects that encourage SMEs to be involved in electronic commerce. SMEs usually do not have the in-house expertise for system integration and many will need to seek external advice and assistance. Perhaps Government should consider grants for SMEs to engage consultants to advise on how to implement electronic commerce strategies.

In conclusion, electronic commerce will be the next lap for business growth. With this Bill, the legal safeguards are in place. The Government should now encourage and help all businesses to formulate a coherent and integrated electronic commerce strategy as a basis for sustainable economic development.

Assoc. Prof. Chin Tet Yung (Sembawang): Mr Speaker, Sir, I rise to speak in general support of the Bill. May I just say first that I was in fact consulted earlier as a member of the NUS Law Faculty regarding this Bill, but I did not make any representations on the issues that I will raise today. So I hope that I am not estopped from speaking on them.

I find it necessary to draw the attention of Members to a number of issues that this Bill raises but are not adequately dealt with. Sir, the Bill, in its intention, is to facilitate electronic transactions, especially commercial transactions. That such a Bill is necessary, there can be no doubt. Among the stated purposes is the security of communications as well as, and I quote, "to promote public confidence in the integrity and reliability of electronic records and electronic commerce." These are aims that we can all support. The question is whether the Bill, as it stands, achieves these purposes.

Let me deal with a couple of preliminary issues. First, despite what the Minister indicated just now, it should be noted that the Bill is not technology neutral. It deals in the main with digital signature systems. Of course, there are other security systems that are in frequent use. For example, certain US companies are using secure socket layers, avoiding the need for the rather more cumbersome process of certification and digital signatures. The Bill does not cover this type of secure transactions even though for ordinary electronic commerce, such methods are perfectly acceptable and efficient.

Second, the Bill adopts somewhat confusing terminology. I refer, in particular, to the use of the term "certification authority". In Singapore, we use the word "authority" to refer to Government agencies and regulatory bodies. Frankly, what the Bill is seeking to refer to are actually certification service providers who are in turn subject to the control of an authority, in this case, the so-called Controller of Certification Authorities. To call a certification service provider a certification authority may be misleading to the general public and I would hope that the term be redefined to its proper form, that is to say, certification service provider.

Third, the Bill is very technically drafted. If one of its objectives is to promote public confidence in the use of electronic transactions, it will take a very serious attempt to make the general public understand the complexities contemplated in the public key infrastructure. In particular, I would draw attention to the technical definition of "digital signature" which in turn depends on the definition of "electronic signature" - two definitions. Both these definitions do not seem to convey the idea to the general public that these signatures are meant to be unique links to the signatory, that they are capable of identifying the signatory and are presumed to be under the signatory's control. It is also necessary to assure the signatory, the public, that subsequent alteration of data would not be possible using such a system. This simple but important reassuring element is not found anywhere in the Bill. Frankly, the Bill needs to be less technical and technology-specific if it were to achieve its purpose of raising public confidence in the use of electronic transactions.

Now I turn to the very serious issues concerning liability in the electronic world. There are at least three areas of concern here for me. The first has to do with consumer protection in the world of electronic commerce; the second, the liability of network service providers, and the third, the liability of certification service providers.

Let me take consumer protection first, and the importance of realising that electronic contracts are very different animals from paper-based contracts that most of us are used to. When we sign a paper-based contract, we are appending our signature to a document that is frozen in print and for that matter in time. Any dispute arising out of the contract can then be referred to the document containing the terms. Usually both contracting parties would have a copy. In the electronic world, contract is a dynamic entity that is capable of change in microseconds. To take a simple example, in the law of contract, it is possible to incorporate by reference terms found in another document. However, such terms would not be binding unless the contracting parties know of their existence at the time of the contract. In the electronic environment, the provision of hyperlinks is commonplace. What is also likely is that the person who posted a document can change a hyperlinked document at will.

My worry is that in electronic commerce, trading partners may change terms, say, regarding time for payment or interest rates without the knowledge of the other party. This would be very serious indeed because if a dispute were to arise, it would be by no means clear that the consumer would have a specific contract to refer to. There is no such thing as an original contract and a copy in the electronic world. How this issue should be tackled is not readily apparent in this Bill.

In passing on this subject on certainty of terms, I should also mention that the effect of the provision in clause 7, where the law provides that certain contracts should be in writing and electronic version can also be acceptable, is a very, very serious one, because it means that contracts of guarantee which are required to be in writing can now be in electronic form. They are not excluded under the Bill. Contracts of guarantee impose secondary liability on guarantors and usually it is absolutely essential to ensure that the terms of the guarantee are clear and that the guarantors know what they are letting themselves in for. This section (clause 7) seems to allow electronic guarantees. I am not sure whether this is intended for it can have serious repercussions on those who are guarantors.

Now I turn to a provision that is both imprecise and perhaps too wide. I refer to clause 10 - liability of network service providers. First of all, there is no definition of what a network service provider is. As the exemption from liability is extremely wide for network service providers, they are exempt from both civil and criminal liability in certain situations. It seems to me to be a serious omission not to have defined the term "network service provider" in the Bill. Leaving such a technical term for the judges to define may be to risk imprecision and create uncertainty. Unscrupulous organisations may also be able to use the wide exemption from liability for undesirable purposes as the provision also can exempt them from criminal liability.

Let me take a simple example. Organisation X may set up a string of servers to allow users to upload copyright or defamatory materials. When prosecuted for such offences, it may claim that it is a network service provider, thus attracting the exemption of some liability under clause 10. Frankly, it may well succeed. Surely this cannot be intended. So if we were to have such a wide provision for exemption of liability, I would respectfully suggest that the definition of a "network service provider" be provided in the legislation. In contrast to the wide exemption for liability of network service providers, certification service providers seem to be provided for only in terms of forged digital signatures and misrepresentation. One should have thought that it is necessary to include a provision to exempt certification service providers from liability relating to inaccurate facts given to them by subscribers provided the certification service provider has taken reasonable steps to verify them. Similarly, there should be some limitation to liability with regard to the use of certificates for purposes that were not intended by the service providers.

Sir, I have raised the issues above not because I am against the Bill. I am strongly in support of such legislation but I think that more careful consideration needs to be given to its provisions. I hope that sufficient time will be given for consideration of these provisions. As it stands, the Bill is technical and the content gaps should be plugged. Frankly, the Bill is seeking to facilitate electronic commerce. We can in principle support such an effort.

Finally, may I just say that we must realise that there will also be social costs involved. Member of Parliament Mrs Lim Hwee Hua has already made reference to these. I am concerned in particular about the ease with which trading can take place on the Net. Indeed, the whole family can now sit down comfortably in front of the computer and shop to their hearts' content. I can see that many may be tempted by the offers that may come through the Net and be persuaded to spend even more than they should. I hope that the relevant agencies will closely monitor this new phenomenon of cyber shopping and to regulate it more carefully if the need arises. Sir, I support the Bill subject to the comments I have made.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.30 pm.

Sitting accordingly suspended at 3.09 pm until 3.30 pm. Sitting resumed at 3.30 pm