Speech by SPS Sim Ann during the Committee of Supply Debate 2012

06 MAR 2012

6 Mar 2012 Posted in Parliamentary speeches and responses

  1. Legal aid and pro bono

  1. Mr Chairman Sir, Mr Hri Kumar and Mr Edwin Tong spoke on legal aid and pro bono.

  2. On legal aid, we will be revising the means test for legal aid. The last revision as pointed out was in 2007, and a review has started and will be completed soon. We will consider Mr Tong’s suggestion which was also made by Mr Michael Palmer before he was elected as Speaker, as well as other members – to exclude life insurance policies from the means test and also revise income criteria. The amendments will be tabled in the middle of the year.

  3. Next, please allow me to share some measures that we have been exploring with regard to fostering more pro bono work.

  4. Some measures which we have considered include first making pro bono work a mandatory component of legal education. The Singapore Institute of Legal Education, or SILE, will work with the two law schools to put this in place in time for the next academic year. This will help foster the pro bono spirit in law students at an early stage as well as help them gain practical legal skills outside of the classroom.

  5. We are also considering with SILE how lawyers who do pro bono work can be better recognised. We are also increasing the number of internship places in the Legal Aid Bureau, or LAB, to support the implementation of pro bono as a mandatory component of legal education. We are also actively growing the pool of assigned solicitors in LAB.

  6. In 2011, 50 new lawyers joined the pool. In the past, the volunteers tended to be from the smaller firms, and we are glad to note that a good number of the new volunteer assigned solicitors are coming from the large and medium sized firms.

  7. I am also glad to note that the Law Society is expanding and enhancing its pro bono programmes. It is working on an online portal to match volunteers with pro bono opportunities, developing a pro bono friendly certification scheme for law practices, and these schemes together with existing schemes such as the Community Legal Clinics and also those run by LAB will provide structured opportunities for lawyers and law firms to do pro bono work.

  8. The Ministry of Law has been making financial contributions to the Law Society’s Pro Bono Services Office, or PBSO. We are reviewing our contribution to PBSO to enable it to do more. We will also be expanding the Legal Aid Steering Committee, chaired by former Senior Minister of State for Law, Associate Professor Ho Peng Kee. A wider cross-section of the legal community including the Judiciary, academia and practitioners will be involved. This will bring key stakeholders in the legal community together in the Legal Aid Steering Committee to set the strategic direction for pro bono efforts and rally the legal community to do more pro bono work.

  9. Together, we hope these initiatives will help foster a greater spirit of giving within the legal profession and improve access to justice.

  1. Bankruptcy
  1. Next, on bankruptcy. Ms Sylvia Lim and Mr Vikram Nair expressed concerns on the administration of bankruptcy cases. Currently, the Insolvency and Public Trustee’s Office, or IPTO, administers over 25,000 bankruptcy estates.
  1. IPTO’s staffing in its Individual Insolvency Division has been increased from 37 posts in 2009 to 74 now. IPTO is aware of the concerns such as those raised by Ms Lim and Mr Nair.
  1. We will continue to review the need for additional resources, always bearing in mind the cost to the public purse.
  1. IPTO is also looking for new ways to improve the efficiency and responsiveness of its processes. For example, in 2011, IPTO enhanced its bankruptcy case management system and introduced an electronic document management system, which digitises and routes public correspondence electronically to case officers, and facilitates monitoring by management. Later this month, IPTO will be launching an enhanced online platform for bankrupts and creditors to access case information, for example, claims made, and the amount available in the bankruptcy estate. Bankrupts can check the submission deadline for their Income and Expenditure Statements and they can also check the status of their applications to travel overseas, manage businesses, or act as a company director. This service will be provided to bankrupts free of charge.
  1. Ms Lim asked if the Debt Repayment Scheme, or DRS, may channel resources away from bankruptcy administration. As I shared with the House last month, the DRS is to allow debtors with regular incomes and debts not exceeding $100,000, an opportunity to avoid bankruptcy. This is part of IPTO’s work. Whether it is in administering bankruptcy cases or administering the DRS, IPTO will continue to look for efficiency gains in their operations.
  1. As for Mr Nair’s question, IPTO does and will continue to take into account the bankrupt’s inability to earn a living as a result of factors such as old age or ill health when evaluating the case for discharge. Other factors considered include the bankrupt’s conduct during bankruptcy, and the amount of contributions he has made to his bankruptcy estate.
  1. Regulating moneylenders
  1. Next, on moneylenders. Both Mr Arthur Fong and Mr Chen Show Mao have spoken on the regulation of moneylenders and moneylending. We share their concerns, particularly over protecting the interests of borrowers.
  1. Allow me to first explain our approach in this area. There will always be people in need of credit and are unable to borrow from banks. Moneylenders meet this need. If we completely abolish the industry, it will only be driven underground, and borrowers will have no legal protection and will be at the mercy of loansharks.
  1. Our approach is to permit the industry to operate, but regulate it to give protection to borrowers, particularly those with lower incomes.
  1. What we have done in 2011 include the following: first, requiring moneylending license applicants to pass a test on the Moneylending Act and Rules; we have also tightened the rules on moneylenders’ business conduct – for instance, they may not obtain borrowers’ SingPass, bank account and other passwords.
  1. Sir, in Mandarin.

去年十一月起 , 律政部颁布了管制 放贷广告的新条例 .

最近 , 中文媒体报道 , 表示合法放贷人希望放宽广告管制 . 报导也指 , 合法放贷公司不能登广告后 , 非法放贷集团趁虚而入 , 民众不会分辨真伪 .

在这里 , 我要重申颁布新条例的初衷 .

过去 , 我们允许合法放贷人通过多种渠道登广告 , 目的是让需要借钱的公众可以货比三家 , 有所选择 . 但是我们也发现 , 过度的广告有可能刺激需求 , 让原本不需要借钱的人跃跃欲试 , 结果负担不必要的债务 . 而且 , 公众想要辨认众多广告当中谁是合法的 , 谁是违法的 , 必须上放贷人注册局的网站查询 .

因此 , 我们决定采取新条例 .

条例规定 , 放贷公司想要宣传 , 只能通过 , 商务指南 ( 比 如黄页 ), 放贷公司本身的网页 , 或者 在放贷公司的营业场所粘贴广告 . 所以不是不能登广告 , 而是不能通过主动推销的方式 来 登 , 也就是英文所谓的 unsolicited advertising.

条例颁布后 , 有利于公众辨认真伪 . 现在 , 凡是接到鼓励人们向放贷公司借钱的传单 , 手机简讯 , 电邮或其他主动推销的广告 , 公众无须再上放贷人注册局的网站查询了 , 可以确认这些都属于不正当行为 , 有可能是合法放贷商违例打广告 , 也有可能是大耳窿在招顾客 . 前者会被放贷人注册局查处 , 后者会被警方调查 .

我们在这里吁请公众 , 避免向这些 公司贷款 . 我们也会进一步通过宣传 , 让公众了解这种主动推销的广告是违例的 .

[Translation:

In November last year, MinLaw put in place new rules relating to moneylending advertisements.

Recently, the Chinese press reported that new restrictions on advertisements by licensed moneylenders has led to a proliferation of advertisements by unlicensed moneylenders, which were misleading the public into believing that they were legal.

Let me reiterate that the purpose of the rules is to prevent moneylending companies from using advertisements to stimulate excessive demand for loans by the public.

In the past, we permitted licensed moneylenders to advertise in a variety of media, to allow borrowers to compare terms across different moneylenders. However, we noticed that excessive advertising could stimulate excessive demand for loans amongst those who did not truly require them, resulting in unnecessary debt. In addition, borrowers needed to check the Registry of Moneylenders’ website to determine whether the advertisements were being put out by licensed or unlicensed moneylenders.

We therefore put in new rules: if moneylending companies wish to advertise, they can only do so through business and consumer directories of services, their own websites, and through advertisements at their premises. They are not disallowed from advertising; they are only disallowed from unsolicited advertising.

The new rules help the public differentiate between licensed and unlicensed moneylenders. Now the public no longer need to verify if the flyers, SMSes, emails or other forms of advertisement they received are from licensed moneylenders because they can be sure that all such activities are not allowed. Such advertisements would either be from licensed moneylenders operating in violation of our rules, or loansharks. Errant licensed moneylenders would be investigated by the Registry and loansharks would be investigated by the police.

We urge the public to avoid taking loans from them. We will continue to spread the message to let the public understand such unsolicited advertisement is illegal.]

  1. Sir, back to English.
  1. We have also been studying how to further strengthen our regulatory framework, and will be rolling out new measures to strengthen the regulation of the industry and the protection of borrowers. We will be amending the Moneylenders Act to strengthen the enforcement powers of the Registry of Moneylenders, safeguard borrowers’ information from unlicensed moneylenders and clarify the provisions governing moneylenders’ place of business.
  1. We have also been considering, for some time, changes to the Moneylenders Rules to further strengthen the protection of borrowers and these changes would address the concerns raised by Mr Fong and Mr Chen.
  1. The directions that we are considering include: requiring the use of Effective Interest Rate instead of Nominal Interest Rate; extending existing caps on interest rate to protect a larger range of borrowers; abolishing non-contingent fees which jack up the true cost of borrowing; and abolishing all exceptions to the limit on the amount of unsecured credit that a borrower can obtain, to close loopholes that could lead to excessive debt. I will give more details when moving the Second Reading of the Moneylenders (Amendment) Bill after the Committee of Supply debate.
  1. We will continue to watch the industry closely, and ensure that borrowers’ interests are adequately protected.
  1. Community mediation
  1. Mr Desmond Lee raised several issues pertaining to community mediation in his cut. In particular, he asked if mediation could be made compulsory and if the CMC could be given powers to enforce community mediation. I thank him for pointing out a very important concern and I would like to assure him that we will be doing more. We are currently in discussions with frontline public agencies, for instance the HDB, on several issues such as compelling the use of mediation for disputes in their purview and enforcing mediation agreements between parties.
  1. Mr Lee suggested that CMCs be given the power, similar to courts, to bind parties for good behaviour. We will consider how best to do this in the context of the whole community mediation framework, and so I thank him for this.
  1. Conclusion
  1. In conclusion, Sir, MinLaw is committed to driving high value and sustained growth in the legal and law-related sectors; developing a sound and progressive legal framework; and ensuring equal access to justice in all segments of society.
  1. Thank you Sir.

Last updated on 25 Nov 2012