QUESTIONS ON THE MINISTERIAL STATEMENT

[Mdm Deputy Speaker in the Chair]

Mdm Deputy Speaker: We have heard the Minister for Foreign Affairs make his Ministerial Statement which has dealt with the Questions on the Order Paper. He has also distributed fuller details as an Annex. I shall allow Members to raise questions addressed to the Minister on the statement he has delivered.

Dr Ong Chit Chung (Jurong): Mdm Deputy Speaker, first, I want to thank the Minister for his most comprehensive and full answer on Malaysia/Singapore relations. It is clear from the statement given this afternoon that Singapore is most reasonable, most accommodative and most patient in our negotiations with Malaysia. I want to ask the Minister whether the Malaysians understand and know the sanctity of international agreements made by them with other countries. Or do they deliberately choose to ignore this? And, if so, what is their motive? With Malaysia chopping and changing its position time and time again, how would Singapore engage meaningfully in negotiations with Malaysia?

We would like to know, although the Minister has mentioned, what is next. Is there any date or time-table in mind or is it going to be just a vacuum? In particular, I would ask the Minister to comment on the announcement that Johor would cease to buy treated water from Singapore from mid-2003 onwards, after their own water treatment plant has been completed. What would be our response to this?

Prof. Jayakumar: Dr Ong Chit Chung asked several questions, whether they know of the importance of the sanctity of the water agreements and so on. From my statement, Members will realise that I have given enough quotations - some old ones, like what Mr Ariff, the Malaysian representative to the Vienna Conference on the Law of Treaties said in 1968 - he was telling the representatives of the whole world that the Separation Agreement and the Water Agreements were very good examples of how agreements or special agreements that could not be suspended or terminated for any political reason - to what Foreign Minister Mr Syed Hamid said last year that they would continue to honour the agreements. But you have to contrast these statements with some of the other statements which I mentioned in early 2002.

What is the motive for making all these statements? I think that is in the realm of speculation. What is important, not so much speculation, is for us to state what are the implications, which I have done, and what is Singapore's position, which is what we have done. That is, we cannot allow treaties solemnly entered into to be lightly disregarded or contravened. And if we allow Malaysia to unilaterally change or alter important provisions of an agreement so critical as the Separation Agreement, then where will all this end? Are we expected to quietly accept any other revisions of critical provisions of the Separation Agreement or any other agreement? So, that is why we have to state our position very clearly.

On his other question, that Johor would be having its own water treatment plants and they may not buy treated water, that is entirely their right. The Water Agreements provide for them to purchase a certain amount of treated water from Singapore. In fact, they have been purchasing water well beyond the amounts stipulated. But if they choose not to, then it is their right, and we cannot compel them to purchase treated water from us.

Dr Ong Chit Chung: What is the next step?

Prof. Jayakumar: As for the next step, we have to wait and see. We have stated our position that the way forward is through peaceful, amicable settlement of disputes. What does that mean? In normal diplomatic practice, countries discuss, talk and negotiate to try to find an agreement. I have outlined in the chronology that we have tried that. We have been reasonable, but there is an impasse. What do we do after the impasse? Then, I pointed out either the Permanent Court of Arbitration or we have to follow the provisions of the agreement, which provide for arbitration, and I contrasted this with the loose talk of war, which is certainly not the way forward.

Mr Tan Soo Khoon (East Coast): Mdm Deputy Speaker, notwithstanding the fact that we are developing alternative sources of water such as NEWater and desalination - and we know that, today, there even exists equipment that allows us to extract drinking water even from air - and in spite of the fact that we are dealing with a party that is bent on shifting the goal post frequently in the negotiations, does the Minister agree that it is still in the interests of both sides to reach an amicable solution to the issues and that the successful conclusion of the Water Agreement is still our aim? As such, an agreement, besides being critical to our survival, serves also to symbolise the inextricable links between our two countries, and that the issues before us should not be allowed to hinder other areas of bilateral cooperation.

Secondly, does the Minister agree that the current climate of frenzy and agitation that has been whipped up by the Malaysian media overlooks the larger interests of both countries and serves only to undermine the efforts to broaden other areas of bilateral cooperation, and it, in no way, contributes towards enhancing foreign investors' confidence in the region at a time when we are faced with many other important challenges, such as economic competition from North Asia and the threat of terrorism, all of which require our joint efforts?

Prof. Jayakumar: As to the first part of Mr Tan Soo Khoon's question, whether it is possible to have any room for further negotiations and talks, I would agree with that - let us continue to talk. That has always been my position. It has always been the position of Prime Minister Goh and of the Government. And I hope that I have sufficiently demonstrated by taking Members through, in some detail, the chronology that we have taken that position because, if we can have a win-win deal, that is good for both countries. After all, it would deal with our future water supply situation. But, as Prime Minister Goh said, we must also bear in mind that, because we do not want the water issue to be a thorn that bedevils our relationship, we will have to develop our own alternative supply of water. But in response to his specific question, if we can have a deal, is it not worth to continue talking? I say, yes, of course, and that is precisely why we have continued our discussions. But for the reasons I have pointed out, they have, through the many changes of positions and, finally, discontinuing the package and not wanting to talk about future supply of water till 2059, made further negotiations impossible.

The second part of his question is related to the media frenzy. Does it not hinder cooperation and undermine efforts between both countries? The answer is, yes. It does not make sense for the two countries to be in this state of ups and downs, particularly on the water issue. But there are so many issues where allegations have been hurled at us. Rather than this state of affairs where accusations have been hurled at us, it really makes sense for us to cooperate in many areas. And, indeed, there are many areas which we have cooperation in the past, and we continue to have areas of potential cooperation, such as in the area of economic cooperation. Both sides are important to each other for trade and investments. I think Members are aware of the figures. We also have to cooperate in the area of terrorism, as the former Speaker has mentioned. And I would add that both Malaysia and Singapore are also well positioned to work together to advance the cause of ASEAN. So, there are many areas where Malaysia and Singapore could work together to advance our mutual bilateral interests and work together for the advancement of the interest of our region.

Mr R. Ravindran (Marine Parade): Mdm Deputy Speaker, first, could I ask the Minister why does Singapore maintain that Johor has lost the right of review when the Water Agreements provide for the review after 25 years, but does not specify exactly when such a review should take place? Second question, could the Minister explain why Singapore is not insisting that the price review be referred to the ICJ or the Permanent Court of Arbitration?

Prof. Jayakumar: On his first question, Mr Ravindran is a lawyer, and also a few other Members, I do not think this is a place to engage in a detailed legal analysis of the Water Agreement provisions. I have mentioned before that if you look at the Water Agreements which are in the bundle of documents, both have clauses on price review, which provide that the rates can be reviewed after 25 years. We can have a legal argument as to whether it should be on the 25th year, or at any time after 25 years, or within a reasonable period after 1986-87. Now, we have legal advice which said that Malaysia has lost its right of review. Well, that is a legal issue which will have to be debated at an appropriate forum, and I have said that it is a matter that can also be put through the process under the Water Agreements.

It is important to also note, in this context, that the Malaysian leaders have said that they chose deliberately not to review at that time when they were entitled to because they feared that the price of treated water supplied by Singapore would also be reviewed. Because the review clauses cannot apply only to raw water, it must also apply to treated water.

Another factor that I should mention, which we pointed out to the Malaysians, is that if they had exercised the right to review then, it might well have caused different decisions on our part as to the amounts of money that we have invested in Johor on various kinds of works, which actually have come to more than a billion Singapore dollars - water works, pipe lines, ancilliary works, the Linggiu Dam. So this is a question which will have to be decided at an appropriate time, but we have taken legal advice.

While we are on the subject, even though we took the legal position, we told the Malaysians, "We know this is important to you. So, we are prepared to discuss this in the context of the package; in other words, on a without prejudice basis. But if you take it out of the package, shelve future water to 2059 and insist on discussing just existing water, then we will have to go by the terms of the provisions of the Agreement." And they have a legal view, we have a legal view.

His second question is: why not international arbitration and adjudication? I would say that, as a general principle, if you ask me as a Foreign Minister and someone who has taught international law, when countries have disputes, it is always preferable to have international adjudication or international arbitration. But as Mr Ravindran knows, that is not something that you can compel another side. It requires consensual basis. Both disputing parties must agree to that international arbitration process. And in this case, of course, it is better for international credibility and transparency and the signals we are giving to the international community that even this dispute is referred to, say, the PCA. But they have said, no. How do we resolve it amicably? So, we have to fall back on the provisions in the Agreement. And the provisions provide for arbitration by that particular mode, and we are parties to the Agreement, and we have said, OK, we follow the provisions in the Agreement.

Ms Irene Ng Phek Hoong (Tampines): Just to follow up on that point. Can we not insist that the more proper forum would be the PCA? It is a more neutral body. If we go according to the laws of Johor, it might not be as neutral as we would like it to be. And I would think that if Malaysia is confident of its case, as it has said it is, it would be prepared to take it to the PCA. My second question is also on water. Given that it is no longer realistic to hope for future water from Malaysia, can the Minister assure all Singaporeans that we are well prepared to be self-sufficient for all our water needs, present and future?

Prof. Jayakumar: On the first part of Ms Irene Ng's question, why shall we not insist, and so on, I have just answered Mr Ravindran's question that PCA requires the consent of both sides. We can insist, but it requires their consent. It is preferable. That is my view. But we deal with the situation as it exists. We cannot compel them. So, we fall back on the provisions of the Water Agreements.

On her second question as to whether we can assure the House, Members have heard both Prime Minister Goh and my colleague, Minister Lim Swee Say, inform the House in detail of all the efforts being done to develop our capability for alternative sources of water - NEWater, desalination - and we will press on with them. But we do not know when and how fast that capability can come about. Therefore, in the meantime, what is important is that the obligations under the Water Agreements must be complied with. And that is why I have said that it is very important. It is not only important from the theoretical principle of observance of international agreements, it is also critical for our existence and survival.

Mr Sin Boon Ann (Tampines): Mdm Deputy Speaker, I would like to go back to the question of the sanctity of contract which, unfortunately, Rais Yatim does not seem to have a basic understanding of. Can the Minister comment on the Malaysian accusation that Singapore has failed to abide by the agreement which was made at independence, offering the right of the Malaysian military to maintain facilities in Singapore? And related to that question, I understand that there was an issue on revised rental. Is there no contradiction when Singapore raised the rental of land for KD Malaya to reflect market rates while objecting to the revision of the price of water to reflect to market rate?

Prof. Jayakumar: Perhaps, during the break, Members have not had time to read the written answer to the question on KD Malaya in the Annex which I had circulated. But if I may just sum up, I will make two points which were further elaborated in my Annex.

The first point is this. While there was a rental increase for KD Malaya, it was not targeted at KD Malaya. It was part of Singapore's policy to adjust rentals on properties towards market rates. And that policy applied to others, including voluntary and welfare organisations. So, that is the first point I want to stress.

The second point I want to stress is: far from wanting to chase them out of KD Malaya, Malaysian leaders were told by Singapore leaders - both the then Defence Minister Dr Yeo Ning Hong and Prime Minister Goh himself - that we wanted them to stay in Singapore, and we made several proposals and alternative suggestions which would have enabled them to stay on, including staggering and phasing in of the new rentals. And our proposals also included an option of our building, at considerable cost to us, of a camp for them at a much lower rental. I forgot the figure. It is in the Annex. But they decided on their own volition that they would leave. And, in fact, in the passing-out ceremony in 1997, their then Defence Minister - and now Foreign Minister - thanked Singapore for these facilities. The quote is in the Annex, and he said that they had no problems with or complaints about Singapore.

The other part of the question as to whether this was a breach of the Separation Agreement, the hon. Member was probably referring to some statements made that, under the Separation Agreement, they had a right to stay in Singapore and so on. Perhaps Members ought to look at the terms of the Separation Agreement, which is also in the bundle of documents. Members will find in the provisions of the Separation Agreement a reference to the right of Malaysia to maintain bases and so on in Singapore. But that was envisaged, together with other items, as part of an agreement to be concluded by both countries on mutual defence, which never materialised. In other words, it was not a substantive provision of the Separation Agreement. It was part of the points indicative of what our future mutual defence agreement could be, and it was never concluded. In other words, from 1965 to 1997 when they left, they stayed here not on the basis of any treaty provisions, but because we wanted them to continue having those facilities. I hope I have answered that question.

Mr Zainudin Nordin (Bishan-Toa Payoh): Mdm Deputy Speaker, with reference to the proposal by Malaysia for the ASEAN+3 Secretariat to be located in KL, may I ask the Minister whether there were other members of ASEAN besides Indonesia, as mentioned in the Statement, who were opposed to this proposal? My second question is: how and when did Singapore express its support to the EAEC proposal, and why is there a confusion on this?

Prof. Jayakumar: On ASEAN+3, I can inform Members categorically that I was present at all the ASEAN meetings where this topic had been discussed, including at some retreats of Foreign Ministers. And I can assure the House that many countries in ASEAN, not just Singapore, but Indonesia and a few others, such as Thailand and Vietnam, also had discomfort and reservations about this proposal.

On the EAEC, I shall not repeat what is in the written answer that I have circulated in the Annex, but Members will find there chapter and verse, quotations from speeches that Prime Minister Goh and others had given, which expressly supported the concept and the idea enunciated by Prime Minister Mahathir on the EAEC.

Mr Gan Kim Yong (Holland-Bukit Panjang): Mdm Deputy Speaker, I would like to seek some clarification from the Minister on his speech, and also to follow up on the questions on NEWater. From what he said regarding the chronological events in the negotiation of water, it would appear to me that the major turning point is the letter from Dr Mahathir to Senior Minister Lee dated 4th March 2002, which led us to a major decision to ramp up our NEWater programme to replace the 1961 Water Agreement when it expires in 2011. I would like to ask the Minister whether he could clarify or elaborate on what is so unattractive or unreasonable in the Malaysian Prime Minister's letter that led to our major decision like this.

Prof. Jayakumar: The full text of the letter is in the bundle. It is a short letter, and the proposals are attached to the letter.

As to why I said in my speech that they were totally different proposals, they came about after Dr Mahathir's various statements that maybe the real price of water ought to be RM8.

What were the differences in this new proposal? Let me recap. Under Malaysia's new proposal that he tabled, 60 sen would apply not only from 2002 for five years to 2006, but also be backdated. Backdated to when? Backdated to 1st September 1986 and 29th September 1987, in respect of the two Water Agreements. And from 2007 to 2011, the price would be RM3 per 1,000 gallons. That was another change. And from 2011 until the expiry of the Water Agreements, the RM3 would be raised annually, based on average inflation rate, as I mentioned in my speech. The other major change is the way they dealt differently with the question of treated water. As far as treated water is concerned, they proposed to fix the price of treated water, which we were selling back to them under the 1961 and 1962 Water Agreements at RM1, from 2002.

There are two points worth noting here. First, there was no backdating to 1986 and 1987. Raw water, revised - backdated to 1986 and 1987. Treated water, no backdating. Second, under this proposal, raw water from Johor is worth RM3 per 1,000 gallons. So, having raised it, after processing, our revised treated water will still be only RM1.

In the same letter, they proposed to supply 100 mgd of treated water in 2011, which was in response to our earlier proposal for the supply of 100 mgd raw water after the expiry of the 1961 Water Agreement. Based on the formula that they proposed, do you know how much we would have to pay? We would have to pay about RM10 per 1,000 gallons of treated water. At this price, treated water from Malaysia would be much higher than the cost of NEWater. It is also much more than desalinated water.

Ms Indranee Rajah (Tanjong Pagar): I have a few questions for the Minister arising from certain facts that the Minister has put forward. We know that Singapore has exercised sovereignty over Pedra Branca since the 1840s. We know that we had separation in 1965, and the first time that the Malaysians had made a claim to Pedra Branca was in 1979 in a map, which means 139 years after we exercised sovereignty and 14 years after Separation. Have the Malaysians given any explanation why there has been this deafening silence on their part in relation to assertion of sovereignty for 139 years or 14 years? More specifically, is it their case that they did not know in 1965 and they suddenly knew in 1979? Or is it that they knew in 1965 but forgot until 1979? Or is it the case that they neither knew nor forgot and suddenly decided in 1979? And, if so, is it a principle of international law that they can suddenly decide that they have sovereignty over their neighbour's property?

Prof. Jayakumar: These are questions which should be directed to the Malaysians. But the pointed way in which Ms Indranee asked those questions, maybe we should include her in our team to argue in the International Court of Justice!

But, really, 1979 was the first time that they published a map. I have looked at some of the maps prior to 1979. And prior to 1979, Malaysian maps showed "Pedra Branca (Singapura)". After 1979, it was shown as being within Malaysian waters, and the "Singapura" was taken out.

Is it a principle of international law that they can suddenly claim ownership, out of the blue, after 130 years, and 14 years after our independence? I do not think one has to be an international lawyer to know that that is not the case. Although, as I have said, we have been in possession, control and ownership of Pedra Branca and the surrounding waters for more than 150 years, can somebody spring this and claim that they are owners? And they also claim that they have the right to come and patrol our waters? In international law, in our view, that proposition is not tenable.

Let me ask hon. Members to imagine this. You have a compound house with a garden. You have lived there all your life. Your parents have lived there all their lives. Your grandparents had lived there all their lives. Nobody has ever challenged your ownership or your forefathers' ownership of that property. You have lived peacefully there and suddenly one of the neighbours says, "Hey, your house belongs to me." And he says he has found some ancient document in his attic and this house belongs to him. You maintain your legal rights, of course, and he says he is going to go to court. And instead of coming to blows, you say, "Go ahead. Take legal action."

You get up one morning and, lo and behold, you find your neighbour climbing the fence, wanting to pitch a tent in your garden, and saying, "Look, since I am now challenging it, there is a dispute, I am entitled to pitch a tent and help you safeguard your property." You will, of course, say no, won't you? So, we have to maintain observance of international law, and observance of international law is that the status quo has to be maintained. And the status quo is that Singapore has always been in sovereignty and ownership of the territory and of the waters, and that continues to be the case, and will continue to be the case, until and unless the International Court were to rule otherwise.

Mr Inderjit Singh (Ang Mo Kio): Mdm Deputy Speaker, back to the issue of water. From all the facts that the Minister has presented to us, obviously, we know that the Malaysians are insincere. They are not sincere in resolving this issue. When the Minister talked about "shifting of goal-posts", I think there are no longer goal-posts now in this whole game.

The Malaysians have also, unilaterally, from time to time, changed their positions, eg, taking the water issue out of the package of issues. Do we not think that we have wasted enough time with the Malaysians? Maybe it is about time the Minister took the position that water is an issue that we are no longer interested in discussing with them and focus on building our own sources of water, rather than to waste the Malaysians' time and our time, and also to bring us all back on a Saturday to discuss issues like this. I think it is about time that we just put our foot down and said that the water issue is no longer for discussion. We have an agreement. If they want to sue us, go ahead and we will settle it in a court of law.

Prof. Jayakumar: Well, I hope the Member is not complaining that his Saturday golf game or whatever has been spoilt. It is a matter of grave importance, whether Saturday or Sunday, it is necessary to meet.

I think it must be clear from my speech that we have been as reasonable as we can. Why? In order to achieve a win-win solution, and we thought it is possible. But, I think we have come to the end of the road, not on account of our intransigence or rigid positions, but because of, as the Member has said, the "shifting of goal-posts", and finally discontinuation of the package by the Malaysians. That is why I say we are at an impasse and we have got to think of how to move on. It is not Singapore's intention to be fixated on this issue because, as I answered Mr Tan Soo Khoon's question, we have to move on and do not let this issue so affect the sum total of our relations, because there are many other issues that we need to focus on, both domestically our economic and other problems, as well as bilaterally, and in the region. So, we need to move on, and I have outlined to Members how we can move on.

Dr Chong Weng Chiew (Tanjong Pagar): It was claimed that Singapore made huge profits by selling water to ships, and the water supplied by Johor should be for domestic consumption. Could the Minister comment on this accusation?

Prof. Jayakumar: This matter - that we buy water from them at 50 cents and we sell at exorbitant rates to ships and therefore we are profiteering - has been answered several times in this House by Prime Minister Goh, as well as myself. So, let me restate the position that this is really without basis. It is an absurd allegation. Yes, PUB sells water to ships at the maximum rate of S$21 per thousand litres. But, as Prime Minister Goh said in this House on 5th April, the sale of water to ships is less than 1% of Singapore's total water demand, or one mgd. And why do we do this? It is deliberately done to price it at such a high rate to discourage demand, not to make a huge profit. But, more important, is this: Malaysia also does the same at their ports. For instance, the Port of Tanjong Pelapas in Johor sells water to ships at the maximum rate of RM455 per thousand gallons for volumes of 50 thousand litres and above. This is obviously substantially higher than the rate charged for domestic consumers, and I presume they do so for the same reason, to discourage demand. So, it is not a question of profiteering. It is less than 1%.

Mr Leong Horn Kee (Bishan-Toa Payoh): Thank you, Mdm Deputy Speaker, finally, you caught my eye! I would like to join my colleague, Dr Ong Chit Chung, in expressing our appreciation to the Government for its very level-headed and rational approach to this very important issue, in contrast to the Malaysian style, which seems to be twisting and turning all the time. I have four questions for the Minister.

First, I note in the Minister's statement that the Malaysians now want to review the second Water Agreement only in 2058. This seems to be a bit late in the day because, as he said, there would be only two years left before the expiry of the actual Agreement. I want to ask whether in the formal Agreement itself, is there a timeframe for an earlier form of consultation or discussion because, obviously, two years is not enough for us to prepare ourselves. If it is true that there is not enough time for us to review until 2058, what are we going to do about our own water provision plans before that?

My second point is that the Minister said that the Malaysians always have this cycle in their relations with us - there are ups and downs, and now it seems like we are in the low end of the cycle. Maybe the Foreign Minister could enlighten the House on whether there are reasons behind their more agitated behaviour now, eg, domestic reasons or other reasons that cause them to want to always use Singapore as a whipping boy on this water issue.

My third point is that we also read in the papers that the Malaysians now want to have their own water processing plant in Johor. In future, they would not need to get processed water from Singapore any more. But we know that Singapore has spent a lot of money; in fact, $1.5 billion on our own water processing plant, which can also cater for Johor. Should we not talk to them about the possibility of this spare capacity to be used for their own water processing, instead of spending their money on building new plants for their purposes? In the process, there is mutual benefit. We can put it in the terms for discussion, so that we can find it mutually beneficial for us to help them to process their water and become part of the agreement. Because the water processing plant can be very expensive for the Malaysians to build themselves.

Finally, on Pedra Branca, I want to ask the Minister what really is the economic or real value of this piece of rock, so to speak, for the Malaysians? For Singapore, we know it is our sovereign right, because we have been owning this piece of island for the last 150 years. But I am surprised that the Malaysians suddenly took a stand and want to claim it. Is there any particular economic, or maybe touristic, reasons for Malaysia wanting to make a claim on this island?

Prof. Jayakumar: First, of the four questions, is that 2058 or 2059 is rather late in the day. I think that is a real under-statement. On this, he asked two questions: is there any provision in the Water Agreements which provides for review and so on. The answer is no. The Water Agreements are self-contained. They do not have built-in provisions which provide for trigger mechanism for a review process. So, the legal position is that - and we are not taking any other position - both Agreements, when they expire, unless both sides have agreed to extend, will lapse. That is the position. So, when we are talking about agreements, we are talking about agreements which will be separate from the Water Agreements for the supply of water after the expiry of the Agreements.

On the second part of his question, since it is late in the day, what should we do and so on. I think the answer is, as Mr Lim Swee Say and others have said, we have to ramp up our capability and capacity to develop our alternative sources of water supply. That is one very important task that we have in Singapore and as Members know, we are taking it seriously. The second question he asked is what could be the reasons behind all these ups and downs and bashing of Singapore. I think Members are used to my style in answering questions, ie, I try not to speculate. It has really reached a point of diminishing returns. Your speculation is as good as mine. I prefer to answer questions and make statements based on hard facts.

Third, they want to have their own water treatment facilities and so on. Should we engage them and say, "Look, why are you guys doing this?" I think if they want to have their own water treatment plants and be self-sufficient in their treatment of water, let them do so. It is not necessary for us to tell them that they should not do so.

On Pedra Branca, it is partly speculative. I do not know how many tourists that rock can take. I have been there. Again, I do not want to speculate. But, obviously, one answer to his question is, if they take away the rock, it would reduce Singapore's space. Let me say this. For every country in the world, whether big or small, political independence and sovereignty over land and territorial waters is of paramount importance. This is a key attribute of nationhood. When we became independent on 9th August 1965, the territory of Singapore consisted of our main island and several smaller islands, including Pedra Branca, as Ms Indranee has pointed out. When we became independent on 9th August 1965, this is what we have. If territorial integrity and sovereignty is important for all nations, it is very important for Singapore as a small country. We are one of the smallest countries in the world. But our size has been determined on independence on 9th August 1965 and we cannot change it. Although we are one of the smallest countries in the world, every inch of our territory or of our waters is of paramount importance, and we will have to safeguard our territorial sovereignty and preserve it. If anybody challenges us, it has to be resolved by reference to an international body. And until any international body, like the World Court, decides otherwise, that sovereignty and territorial integrity must be preserved by Singapore at all costs.

Mr S. Iswaran (West Coast): Mdm Deputy Speaker, the Minister has taken a somewhat unprecedented move in releasing correspondence between the leaders of Singapore and Malaysia, as well as other communiques at the diplomatic level. His reason has been that the hope for a win-win outcome on the issue of water, in particular, is now not realistic. May I ask why he has come to this conclusion at this stage, because most Singaporeans and this House certainly are very familiar with the rhetoric coming from across the Causeway on the issue of water, and the noise levels have a cyclical nature? This time, the noise levels have gone up again. But we have arrived at a very major decision, it would appear, on this matter, in wanting to set the record straight publicly, and I would appreciate it if the Minister could clarify the thinking behind such a move.

Secondly, we have taken a move of great gravity on a matter that has been at the centre of bilateral ties between Singapore and Malaysia for some time. I think Singaporeans would want to know and appreciate how is this going to repercuss on the broader bilateral ties between our two countries. Because we have stated that we want to move on from the issue of water on to other matters, and find resolution. I would appreciate some clarifications from the Minister on that.

Prof. Jayakumar: The first part of Mr Iswaran's question was about the release of these documents, exchanges and diplomatic notes. I think it would have been clear from my speech that I have done so with reluctance. But why are we doing this? If I may sum up the reasons again: first, we did not want to release all these documents because there was still hope that the negotiations could continue and there would still be a door open for talking. But, alas, that was not the case. If it had been just that, it would have been all right. We have been painted as the unreasonable party, the intransigent party, the party to blame for all this. And accusations and allegations have come forth with that line.

It is important that these accusations have to be countered. Otherwise, repetitions of untruths, and repeated incantations of these untruths might be taken to be the truth. It is important for Singaporeans particularly, to know the facts. To do that, should we just say, "That is not true", and sit down? I think we have to come out with all these facts so that the facts and the documents will speak for themselves. It is important that all concerned have a clear idea of where we are, what we are and how we came about.

The second part of his question was, since this has been a central issue, whether it will impact on other areas of cooperation. In answer to an earlier question, I have made it clear that there are many other areas of cooperation which both Singapore and Malaysia can gain to benefit by focusing ourselves on them. And that is precisely why we should not let this be such a spiky thorn in our relationship, that its non resolution continues to affect the sum total of our relationship. That is why I pointed out that we are in this impasse. Let us find a way out of the impasse. If talks are not possible, then arbitration - and let us try to move on. There are many more urgent things at stake.

Dr Mohamad Maliki Bin Osman (Sembawang): Given the history of their habit of changing their minds ever so often, does the Minister foresee that they might decide to go back on the package route again? If so, what is our response to that?

Secondly, now that the package has been dismantled, can the Minister explain how the other bilateral issues, apart from water, are going to be resolved?

Prof. Jayakumar: Members somehow do not believe me when I said that I would not like to speculate. If a proposal comes back and they say, "Let us resume the talks", I would take it a step at a time and deal with it when that happens.

The other issues are unresolved and they would have to be dealt with separately on a stand-alone merit. I think that is very clear. They are no longer linked.

Dr Tan Cheng Bock (Ayer Rajah): Mdm Deputy Speaker, the Minister must be aware that the Malaysians have no intention to settle the various issues. To the Malaysians, no solution is also a solution, and we have to remember this. They have their own domestic politics to play to. If they were to settle all the issues, I think they have a difficult way of winning their ground. So, we must have this behind our heads when we go and negotiate.

Therefore, I ask the Minister to see whether there is an easier version of what he has given to us as our ground. I think our ground is very important. Let us concentrate on our own ground, ie, we must convince Singaporeans, for example, that we are not unreasonable, that we are always sticking to the 3-sen price negotiation, and that we have actually been the more reasonable party. And that we are also prepared to up it to 45 sen, but it is always changing at every negotiation table. Therefore, I believe that the Malaysians have no intention to sell us water in the coming years. Let us face the truth.

For Pedra Branca, let the ground know that it belongs to Singapore. It is not a disputed territory and that if Malaysia wants to challenge us, they have to do so through the International Court, and that their navy cannot come and patrol our waters. And I think we should tell them very seriously that we really mean business.

Prof. Jayakumar: I thank the Member for his speech. He asked whether I could give an easier and simpler version of my speech. I thought his summary itself is excellent and maybe we should distribute it to the Members.

The point that Dr Tan Cheng Bock made is right - that the process of getting Singaporeans to know the facts cannot just be done by the Foreign Minister making this one-hour speech in Parliament, and people reading it the next day. I think the thrust of his point was that Members of Parliament, in turn, will have to explain to residents and constituents. And I hope that it would not be just the Government MPs. It has to be a collective effort of all the MPs in this House. Whatever assistance they may need from my Ministry, of course, we will be at their disposal.

Dr Lily Neo (Jalan Besar): Mdm Deputy Speaker, could the Minister enlighten this House on the possible reasons why the Malaysians are using the word "war" so loosely? Can they be seriously considering waging war on Singapore? Do they not realise the catastrophic and destructive effects of war on both countries? How can they be treating war so lightly? And how can they be so irresponsible?

Prof. Jayakumar: Dr Lily Neo is absolutely right that such talk of war does not make sense, and the sooner it stops the better, because it is provocative and it heightens the temperature which makes bilateral relations very, very tense and spiky. Not only that, as another Member alluded to, it is also not good for investor confidence. So, I agree with her that such talk is both senseless and dangerous.

Mr Zainul Abidin Rasheed (Aljunied): Mdm Deputy Speaker, I have two supplementary questions. One, the Minister's statement has been a watershed development in more ways than one. In other words, it is no goreng pisang matter for anyone to take it lightly. It is, in a way, a matter of our lifeline. My question is: how does the Minister intend to get the message across the Causeway to the Malaysian people when the Malaysian media and leaders are bent on giving misrepresentations?

Secondly, having bared the facts - and Singapore needs to do that - how does the Minister ensure that it does not add unnecessary heat to the important bilateral relations which are already emotionally charged in Kuala Lumpur and with the word "war" being bandied around irresponsibly?

Prof. Jayakumar: The Member is right that the Malaysian media does not portray the Singapore side of the story either sufficiently or accurately, or sometimes not at all. We will do our best to present our facts. As I mentioned before, all these will be on the website of MFA and also on the Kuala Lumpur Mission's website (embassy's website), and we will find other ways. But I hope that both the people and leaders in Malaysia will read the statement carefully because it is not intended to add heat, as Mr Zainul has mentioned. Rather, I have carefully drafted my statement in a measured way to present the facts. And facts sometimes not only can elucidate but they can also dispel rumours and false allegations, but the facts must be able to speak for themselves. And bringing up the facts cannot be said to be motivated by wanting to up the temperature.

Mr Ahmad Khalis Bin Abdul Ghani (Hong Kah): Mdm Deputy Speaker, I have two supplementary questions. Firstly, I understand that while we operate a lighthouse at Pedra Branca, we also operate a lighthouse at Pulau Pisang. But while we say that Pedra Branca belongs to us, we do not have a similar position as regards Pulau Pisang. My first question is: what are the differences in Singapore's position as regards Pedra Branca as opposed to Pulau Pisang?

Second question, to borrow my colleague, Ms Indranee's terms, has Malaysia decided or realised or in any other way taken any steps to claim any other island that belongs to us, besides Pedra Branca?

Prof. Jayakumar: What is the difference between Pedra Branca and Pulau Pisang? Let me, first, say upfront that Pulau Pisang belongs to Malaysia. We have never disputed Malaysia's sovereignty over Pulau Pisang. But our Maritime Port Authority (MPA), however, has a right to operate the Lighthouse on Pulau Pisang and the plot of land on which the Lighthouse stands as well as the roadway leading to the Lighthouse was granted in perpetuity to Singapore, so long as Singapore operates the Lighthouse. And this was in an indenture between the Johor Sultan and the Straits Settlement's Government in 1900 and we became successor to that. So, for Pulau Pisang, we have never contested their sovereignty.

As for Pedra Branca, we have sovereignty over it. It is ridiculous to say - as the Malaysians have said - that Singapore can only operate the Lighthouse for Malaysia. I might add that, in 1968, the Malaysians objected to the flying of the Singapore flag over the Lighthouse in Pulau Pisang. They objected to the flag and we took it down. But they never objected then, or later, to the flying of the Singapore flag on Pedra Branca.

Are they making any other claims? I think the Member is asking because there were some press reports, I believe, in March last year where Berita Harian carried a report from some Malaysian lawyer. That might be the report where it said that Pulau Tekong Kechil was part of Johor. But this is important. The very next day, Malaysia's Foreign Minister publicly denied the claim on Pulau Tekong Kechil. Foreign Minister Syed Hamid said, Malaysia had "no wish to create new problems for Singapore by staking new claims" and that "as far as Singapore was concerned, the only outstanding territorial matter with Singapore was over Pedra Branca."

Dr Teo Ho Pin (Holland-Bukit Panjang): Mdm Deputy Speaker, may I ask the Minister whether Singapore has considered using mediation, instead of arbitration, to resolve this matter?

Prof. Jayakumar: The difference between mediation and arbitration is this. A mediator would listen to both sides and suggest a solution which will not be binding, and it is up to both sides. Arbitral tribunal or court will listen to both sides' facts and evidence, and give an award or decision which will be binding.

Is mediation possible? I will not rule out anything. But after so many years of discussions at such high levels between officials, between Ministers and between Prime Ministers, and even involving Senior Minister, and we do not reach an agreement - and I have shown you what their attitudes have been - I am not sure whether mediation would produce better results. But in line with my position of amicable settlement of disputes, I would not rule out any form of amicable settlement of disputes.

Mdm Halimah Yacob (Jurong): Two supplementary questions, Mdm Deputy Speaker. First, I would like to have the Minister's views as to how he sees what has happened between Singapore and Malaysia, how has that impacted upon the relationship in ASEAN. Because many outside ASEAN look upon ASEAN as being not a very strong organisation, particularly in this era of multi-lateral organisations where people get together in order to put up a great supposition of strength. How has this impacted ASEAN?

My second question is whether the Minister considers that there is a need or possibility to develop a channel for dispute settlement among the ASEAN countries itself because, up to now, there appears to be no channel for such a settlement of disputes, if such disputes develop within ASEAN? And whether this would be something useful for ASEAN to consider, particularly, since the ASEAN countries like Singapore and Malaysia are very important countries in the grouping?

Prof. Jayakumar: On the first question of whether the difficulties in our bilateral relations will affect ASEAN, I would give a mixed answer, yes and no. No, in the sense that, fortunately, the way ASEAN has developed over the years, it has had a very good tradition of ASEAN meetings continuing among officials and Ministers, and the Ministers of the 10 countries meeting on ASEAN projects without letting bilateral differences impede cooperation. So, if Members look back in the history of ASEAN, the members of ASEAN have had, at different times, their ups and downs in their relations, not just Malaysia and Singapore, others too. Indonesia and Malaysia had problems over illegal immigrants, Philippines and Malaysia had other problems, and so on. But the laudable feature of ASEAN is when you go to meetings, whether at leaders' level, Foreign Ministers' level, or other Ministers, not only do we sit down and discuss, but there is also the personal camaraderie that continues. For all the differences we have with Malaysia, Foreign Minister Syed Hamid and I are able to meet and talk and discuss at ASEAN meetings. So, in that sense, I would say the answer is "no". The "yes" part of a mixed answer is that, while it has not affected cooperation within ASEAN, obviously, questions would be asked by commentators outside ASEAN as to why some countries are bickering, and so on, and the impression may be given that ASEAN countries are in a disarray. So, I think it is important for ASEAN countries to try to resolve these disputes among themselves.

Her second question was whether it would be useful for ASEAN to have a mechanism for dispute settlement. Actually, the answer to the question is that there is a fairly high level dispute settlement procedure provided for in the ASEAN Treaty of Amity and Cooperation. It is known as the TAC. That is a very high level mechanism which will involve the high council in ASEAN. It involves the leaders of all the ASEAN countries. But that envisages a very grave kind of situation and that dispute settlement procedure mechanism has not taken place and, I think, on the understanding that most countries should be able to work this out amongst themselves.

Assoc. Prof. Ngiam Tee Liang (Nominated Member): In view of the twists and turns of the issues and the tendency for the Malaysian media to play up on some of these issues, I would like to ask the Minister whether, in his assessment, there could be a possible danger for terrorist groups to exploit the issues, and this becomes the Achilles' heel in our bilateral relations. If so, what can we do to overcome this and not let the seriousness of the way the situation is developing to actually add to the danger we are facing from global terrorism?

Prof. Jayakumar: Of course, both countries will always be mindful of that. But I would like to allay the fears of the Members that, amidst all this, one of the silver linings, if I may say so, is that the professionals in our law enforcement agencies on both sides - our intelligence, our narcotics, police, CID - have an excellent record of close cooperation. And this record of close cooperation continued in the past and continues even during the ups and downs in bilateral relations. And I can say so from personal knowledge because, for some years, I was Minister for Home Affairs, and there is excellent cooperation. In fact, only a few days ago, one of our highest awards was bestowed by President Nathan on Malaysia's Inspector-General of Police - I turned up at the Investiture Ceremony - and that cooperation will continue. It has to be so. We are so close to each other and that there is so much movement of people at the borders that, if we were not so, both countries will suffer in dealing with not just terrorism, but law and order, narcotics and so on. So this is one aspect which I should highlight.

Dr Tan Boon Wan (Ang Mo Kio): Mdm Deputy Speaker, the Minister has just now referred to the furore by Malaysia on Singapore over defence strategy, and also Tim Huxley's book. I would like to ask the Minister if he could give us an insight why this is so, particularly when Singapore is a small island and the strategy is probably the most meaningful. And, secondly, the book was written by an academic, not in Singapore, but really in the UK.

Prof. Jayakumar: Again, I do not know. It did not make sense. The book was published two years ago. It is not a book which was written or published by the Government, but by an academic. When it was published two years ago, there was no fuss, and now, out of the blue, it is used as a peg to stir up emotions. I would not be able to tell you why. But I will tell you, as I did, that such fanning of emotions is, to put it very bluntly, dangerous.

Mr Low Thia Khiang (Hougang): Mdm Deputy Speaker, at least, now we have heard something more positive. The Minister has said that there is good cooperation between the civil servants of Home Affairs Ministry and their Malaysian counterparts. When the civil servants could strike such a cooperation with their Malaysian counterparts, I wonder why are our Ministers not able to. In fact, Mdm Deputy Speaker, I was quite surprised to hear about the chronological sequence of negotiations that the Minister and the Prime Minister had with the Malaysians. It seems to me that our Ministers are being pulled around by the Malaysians, going up and down, and changing the goal posts here and there. To me, I thought this is quite uncharacteristic of the PAP Government, which is always talking about no nonsense and being tough. So, I am quite surprised that, in the bilateral relations and negotiations, it seems that Singapore is being pulled around.

Secondly, Mdm Deputy Speaker, I understand that we have a non-speculative Foreign Minister, always based on facts, very diplomatic and very accommodating and, I think, in the negotiations, was even prepared to dance with the Malaysians from 45 sen to RM3 and so on, for water supply. But I wonder whether up to this point in time, with the approach that has been taken, we have reached the point where there is a need to open up everything to the public and to tell the public that perhaps there is no return to negotiations. With the way of Singapore's approach to the negotiations - so accommodating, so diplomatic - could the Foreign Minister comment on whether this has been the correct approach so far? If so, why is it that we end up in such a situation?

Prof. Jayakumar: That is a good question, because it causes us to pause and reflect. As he said, why have we reached this position? Have we reached the position because of some "incorrect" approach of the Foreign Minister and the correct approach of their Foreign Minister? These are not personal whims and fancies of a Singapore Minister dealing with personal whims and fancies of a Malaysian Minister. These are negotiating positions and national positions taken in the conduct of negotiations.

Yes, we have been accommodating and very reasonable in the negotiations. But if the hon. Member had listened to me, and as it would be clear from the documents, he would have seen how the Singapore side - not just the officials or the Foreign Minister, but leaders - the positions we have articulated at every turn, what has been uppermost in our minds has been the national interest of Singapore. And in pursuing the national interest of Singapore, in the negotiations we have had certain markers, and those markers have not been compromised. What are the markers that have not been compromised?

First, observance of agreements solemnly and willingly entered into. On observance of the Water Agreements, the guarantees in the Water Agreements, we have always insisted on and never departed from them.

Second, we were prepared to have the issues resolved in a package, in return for future water. That would have been in Singapore's national interest. That has been a central point in the negotiations. Have we conceded on that? We have not conceded on that.

Third, when they discontinued with the package and insisted on the price of current water, our position has been another marker - that we are prepared to discuss the price of current water in the context of the package. If they take it out of the package, push future water to 2059, it is off.

Fourth, when it is off, we cannot be bullied and intimidated into agreeing to unilateral revision of the Water Agreements. There are clear provisions in the Water Agreements, and they cannot do it at their whim and fancy. It has to be resolved in accordance with the law. And, in accordance with the law, we say they have lost the right to review. They disagree, then there is a process. So, at every stage, I think it should be clear that Singapore's negotiation position has had, uppermost, the overriding interest of Singapore.

Mr Ang Mong Seng (Hong Kah): Mdm Deputy Speaker, both Singapore and Malaysia have agreed to sign the special agreement on the 6th of next month to refer the Pedra Branca matter to the International Court of Justice. May I ask the Minister how long will the ICJ take to resolve this problem and, during this period, what is Singapore's stand on the management of this small island?

Prof. Jayakumar: I wish I could give the hon. Member a specific deadline as to when the Court will decide after the signing of the agreement, but I am unable to do that. There are certain timelines. After signing the agreement, within so many months, each side must submit certain kinds of documents. And after a particular date, each side must reply to the other's documents, and so on, in what is known as the pleadings. Then, a date is set for hearing. When a date will be set for hearing depends on the workload of the court, how many other cases there are in the queue, and so on. So, I am unable to give him a precise answer, but I think it will take at least about two years.

In the meantime, what happens? Nothing happens, because we are in ownership, control and possession, and exercising sovereignty over the island. And that continues. That is the status quo. And that will continue until the Court has decided, and it will change only if the Court decides otherwise.

Ms Braema Mathiaparanam (Nominated Member): In the Minister's concluding remarks on the Pedra Branca matter, he said that the consequences for both countries would be costly. Could he clarify what exactly is meant by that statement? In terms of our navy and air force around the Pedra Branca area, I think they face continual agitation from the Malaysian forces. Could the Minister enlighten us on what are the instructions given to them in such instances?

Prof. Jayakumar: I think the closing part of my statement on Pedra Branca must be quite clear. In other words, we have intrusions. As I have said, there will be incidents, there will be accidents, and we have a high risk of loss of lives, damage, and there will be a lot of consequences. I do not have to spell this out.

As to her second question, what are the instructions given, I have no doubt that the Defence Minister, Dr Tony Tan, would have given whatever instructions that are necessary for us to maintain our territorial integrity and sovereignty.

Ms Irene Ng Phek Hoong: The Minister said that our common bilateral interests exceed our bilateral differences. Can I ask the Minister how does he see the two countries cooperating and increasing their cooperation, especially given the present atmosphere?

Prof. Jayakumar: I hope Ms Irene Ng will understand. I do not want to repeat. I think I have answered the question posed in a different form by Mr Tan Soo Khoon. I answered that there are areas for economic cooperation and, in answer to Prof. Ngiam, I talked about cooperation in security and law enforcement areas, cooperation in the wider area in ASEAN and so on. So, I think there are areas for cooperation, and we should endeavour to continue in those areas and try to resolve these issues in a way that does not mar such cooperation.

Mr Chiam See Tong (Potong Pasir): Mdm Deputy Speaker, Dr Tan Cheng Bock has observed that, to the Malaysians, no solution is their solution, and I believe Dr Lily Neo has alluded to the loose talk of war. The situation of no-peace no-war is not good for both sides. There may be an accident and a war can happen. In 1914, hon. Members would know that the First World War was started by just the shooting of one man. So, in our case, I think we should not allow this kind of a situation, where there is no-peace no-war, to exist. In this light, I would like to know whether or not Singapore is willing to make a standing offer to Malaysia to have the outstanding matters arbitrated or to go before the International Court of Justice, since the Minister has said that it needs the consensus of both sides to go to the help of a third party.

The other question is: has the situation at Pedra Branca improved since the recent statement of the Minister for Defence, Dr Tony Tan, with regard to intrusion of Malaysian naval vessels in our Singapore territorial waters?

Prof. Jayakumar: The answer to the first question on whether we would make a standing offer, is yes.

Mr Chiam See Tong: Have we made the offer?

Prof. Jayakumar: Yes, because we offered to go to the Permanent Court of Arbitration, and they said no. And, as is clear from my speech, since they have said no to that, to resolve the impasse, we said, "Look, let us follow the provisions in the Water Agreements." But, actually, that is a move that they have already commenced by issuing a notice. So, we have commented and we have said that we are prepared to take that route.

Has the situation on the ground at Pedra Branca improved? My understanding from my discussions with Dr Tony Tan is that the situation has not improved.

Mdm Deputy Speaker: I shall take one last clarification. Mr Chandra Mohan.

Mr Chandra Mohan K Nair (Nominated Member): Mdm Deputy Speaker, perhaps we may need to consider alternative forms of discussion to try and resolve the problem or, at least, minimise the problem. Would this House consider alternatives? For instance, if it is possible, let us disseminate information as much as possible in Singapore - which is being done now by the Hon. Minister, which is a positive point. Let the mass media disseminate that and perhaps on the Internet. Let the Malaysian press be told to disseminate there too, because this is a serious problem. I cannot understand why human beings need to have this kind of problems when the citizenry, the people, just want to carry on with life. And if there is a problem and an impasse between Ministers or Cabinet, I think let us look for alternatives. I would even suggest ---

Mdm Deputy Speaker: Order. Mr Chandra Mohan, can you please ask your question?

Mr Chandra Mohan K Nair: Yes. Would the Minister consider a group of parliamentarians from Malaysia to appear before the Parliament in Singapore, and vice versa, to present our cases to each Parliament and present the facts? And by having this kind of dissemination of information, would it somehow minimise the problem, and the Ministers with powers would know what their responsibilities are in trying to resolve the problem? And the people's power would sort of override and say, "Let us resolve the problem." Because we are not finding a solution. And, over the years, this has happened.

Prof. Jayakumar: If indeed I was in a position to order the Malaysian press to publish my statement, of course, I would do so. But I cannot quarrel with what Mr Chandra Mohan has said about the widest possible dissemination of the facts. I agree with the objective. We shall endeavour to do so, but I hope he will also be part of this process as a Nominated MP. I do know that he has contacts in Malaysia. We should use all possible contacts to disseminate the facts, just as we need to understand what motivates them to do or say what they have done and said.

As to alternative forms of discussion, I am not averse to any and every possibility which can aid the process of solving bilateral disputes. And I have never taken the position that the promotion of goodwill and good relations between countries is the sole preserve of the Foreign Minister. It is not. It must involve a whole spectrum of Ministers, officials, non- governmental bodies, and parliamentarians have a role to play. But on the specific suggestion of sending Singapore parliamentarians, Mdm Deputy Speaker, I do not know how we will form such a group to go up to Malaysia and present the facts in the Malaysian Parliament. How different would it be for the Minister and his negotiating team presenting it, face to face with the Malaysian Minister who has the full powers and the direction to decide? If he thinks he can resolve that, then let us consider that. But, as a general principle, and as Foreign Minister, I welcome all suggestions, but they must be practical and workable.