15 Sep 2020 Posted in [Speeches]
Good morning. Happy to join everyone here today.
This is the 6th edition of the ASEAN Summit, which speaks volumes about the event’s success in bringing regional and thought leaders together. There will be economic challenges ahead and it will be vital for us to continue sharing ideas and think up new ways to promote ASEAN business integration.
This year, we also welcome the China-ASEAN Business Alliance as a new organiser of the summit – and there are strong linkages between China and ASEAN. In 2019, Chinese foreign direct investments into ASEAN totalled over US$9 billion. Furthermore, in the first half of 2020, ASEAN was China’s top trading partner at 15% of China’s overall trade.
However, we, like almost everyone else in the global economy, are facing headwinds this year due to COVID-19. COVID-19 has had a differentiated impact across ASEAN and there remains considerable uncertainty ahead of us. Given the ever-present possibility of resurgences and wide-ranging economic impact, recovery in ASEAN will be protracted and also uneven.
In both good times and bad, Singapore remains committed to seeing ASEAN realise its full economic potential. A strong ASEAN is good for the region and, of course, benefits everyone. One of ASEAN’s largest investment sources has always been intra-ASEAN. However, a significant proportion of this actually comes from outside the region, channelled through Singapore.
Today, I will speak on what we have done to support investments into, and through, Singapore and look at what more we could do. In particular, I will outline three specific areas in this speech.
First, let me touch on what we have done to support our businesses and workers, especially amidst the COVID-19 pandemic. COVID-19 has presented challenges across a spectrum for all our businesses and workers. To support them, we had to move quickly. The four budgets announced by DPM Heng totalled close to $100 billion, the first of which was announced in February this year. These were aimed at helping businesses tide over this difficult period, retain their employees, and preserve core capabilities.
On top of economic relief, we also passed legislation to provide a different, but equally important, type of assistance.
a. The COVID-19 (Temporary Measures) Act allowed for the deferment of certain contractual obligations that could not be met due to the onset of the pandemic. That also increased the insolvency thresholds for both individuals and businesses, to provide additional safety nets against the unforeseen economic impact of the pandemic.
b. The COVID-19 (Temporary Measures) (Amendment) Act went further by striking a balance in the commercial, industrial, and office rental framework, and sought to protect SME tenants.
- These measures were by no means easy. Sanctity of contract has been, and will continue to be, a core principle of our legal system. However, in these exceptional times, these measures were necessitated by far more fundamental considerations – balance in economy, fairness, compassion, and long-term survivability of everyone in the economy. They also provide our businesses and people breathing space needed to reorganise and tackle the pandemic together and look long-term. Beyond these measures, we are also working on legislation to establish a temporary simplified insolvency programme to help micro and small companies in financial distress.
- Beyond our shores, Singapore has also continued its efforts to strengthen cooperation with our partners in order to deal with COVID-19. At the virtual ASEAN Summit earlier this year, Singapore discussed with our regional partners how we could work together in areas such as sharing technologies to contain the pandemic, vaccine production and distribution, and also upholding a rules-based international trading system.
- We’ve also sought to maintain supply chain connectivity and keep trade flowing. These arrangements, such as the Singapore-New Zealand pact in March, maintain the cross-border flows of necessities. China and ASEAN nations such as Brunei, Laos and Myanmar, are some of the signatories to the pact.
- We are also working hard to safely restore international connectivity. We’ve established fast-lane arrangements thus far with China, Malaysia, Brunei, New Zealand and the Republic of Korea. We are currently in discussions with Japan and several other countries to do the same.
- Second, how our legal regime has allowed us to better weather the impact of COVID-19 and remain as a trusted place for business is a crucial question for us. Our legal regime has been a key pillar of support during this period and it must remain so. Businesses have continued to exhibit confidence in Singapore despite the COVID-19 headwinds. Two examples:
a. In March, Hyundai Motors announced the establishment of the Hyundai Mobility Global Innovation Centre in Singapore.
b. Similarly, in June, Tata Consultancy Services also announced plans to launch the Digital Acceleration Centre here in Singapore.
- Such trust in Singapore as a business and financial hub is built largely on confidence in our robust legal system and strong adherence to the rule of law, but we cannot take it for granted. Businesses like Hyundai and Tata can be confident that their investments will be well-protected. If any investment disputes do arise, businesses are assured that they can be resolved quickly, fairly, cost-effectively and, most importantly, transparently.
- In this regard, one dispute resolution mechanism that we have been developing is mediation because it saves time, saves cost, and most importantly, also preserves business relationships. With the UN Convention on International Settlement Agreements Resulting from Mediation, more commonly known as the Singapore Convention on Mediation (SCM), having just entered into force on 12 September 2020, we believe that this will facilitate the enforceability of mediated settlement agreements. Currently, the Convention has 53 signatories, including China and 5 ASEAN member states, and 6 parties, including Singapore. We are encouraged by the strong support for the SCM, and believe that more countries will come onboard as they see the value the Convention will bring to international dispute resolution, including mediation and of course international commerce.
- Singapore has also made notable enhancements to our restructuring and insolvency framework. The Insolvency, Restructuring and Dissolution Act commenced on 30 July 2020 and was the culmination of many rounds of consultations with experts and industry partners. The Act consolidates personal and corporate R&I laws into an omnibus legislation, encompassing legislative improvements to align our framework with international best practices. We constantly review our frameworks in various areas because a progressive legal regime is vital to meet the fast-changing demands of the commercial world. We also hope that the regime’s renewed emphasis on cross-border restructuring will create new growth opportunities for insolvency practitioners such as lawyers and accountants, as well as financial institutions.
- Finally, strengthening the legal system further is an important vision that we have. Moving forward, there is yet more to be done to strengthen our ecosystem. Let me touch on a few areas.
- Firstly, digitalisation, which COVID-19 has accelerated and really rendered to be a matter of urgency and necessity. Maxwell Chambers, our hearing centre for alternative dispute resolution, is proactively collaborating with partners to offer parties integrated and seamless virtual hearing services in place of physical hearings. Just recently, it launched the International Arbitration Centre Alliance, together with Toronto and Ottawa’s Arbitration Place and London’s International Dispute Resolution Centre. This expanded network of hearing centres across the globe will facilitate reliable e-hearings or semi-virtual hearings for international parties in different locations. Our Singapore law practices will also need to capitalise on technology to improve their offerings.
- Under this “new normal”, practices that are able to quickly adapt and capitalise on technology to enhance the accessibility, quality and of course value and delivery of their services will garner a lasting advantage. To support law practices in their digitalisation and business continuity plans, MinLaw has worked with our partners at the Law Society, Enterprise Singapore and the Infocomm Media Development Authority to extend the Tech-celerate for Law programme. The end-date of the programme has been extended to January 2021 and grant support has been increased to 80%.
- MinLaw is also launching the Technology and Innovation Roadmap next month, which will help law practices better understand the legal technology landscape and framework, and work out what they can do to embrace and upscale their technology services. Further, the roadmap will also provide an overview of existing and upcoming initiatives by government and key legal stakeholders so that they can tap on them.
- Beyond technology, we also need to continue expanding our international reach and capabilities. On the institutional front, we will continue to build international partnerships that set the stage for deeper and more meaningful cooperation. Let me give some examples of what we’ve done in the last couple of years.
a. Since 2014, we have had the Singapore-Myanmar Integrated Legal Exchange which has formalised the exchange of legal expertise between both countries.
b. In December 2019, MinLaw signed a Memorandum of Understanding with the China Ministry of Justice to establish a Joint Legal Cooperation Council that will meet biennially.
c. This year, the Singapore International Arbitration Centre has also signed Memoranda of Understanding with the law faculties of universities in Thailand. This will serve as a platform for future and further collaboration.
- On the industry front, lawyers must also look at the region for expansion, for growth. Look at it as an opportunity to expand and therefore build the requisite capabilities within the firms to do so. The China-Ready Programme launched by MinLaw hopes to equip our lawyers not only with legal skills and knowledge but also with cultural sensitivity, local and commercial context, enabling lawyers to seize new opportunities in a fast-moving and fast-changing Chinese market. The Programme began in August this year and we believe it will open more doors for Singapore Law Practices.
- Let me in conclusion say a little bit about the evolving uncertainty of the COVID-19 crisis, which we almost take for granted today. We not only have to combat the pandemic, which we all have to do, but also take stock and not lose sight of our fundamental value propositions as a country and as a jurisdiction, and use that as an anchor to chart a way forward. We will continue to build on our strong fundamentals as a business, financial and legal hub, based on the cornerstones of trust, stability and neutrality. These are all qualities that will withstand the test of the time, and will be relevant in any situation – pandemic or otherwise. We will do so by closely working with our partners, internationally, domestically, and within the industry, so that we can all emerge stronger from the pandemic. These are discussions that I hope, I know, you will have in the course of this discussion.
- So thank you very much once again for inviting me here. I wish everyone a fruitful and meaningful discussion. Thank you.
Last updated on 15 Sep 2020