Monday, April 30, 2012

The New Normal: Celebrating a New Media victory (or 'Why We don't need your COC')

Exactly one year ago, we were in the midst of one of the fiercest and most intensely fought out general elections in the history of our nation (post independance). There was much drama and passion; Grand and inspiring speeches by the likes of Vincent Vijeysinha; Rising chorus of anger amongst the voting public; Open display of disdain for PAP candidates (in a country that was often driven by fear of political reprisal, whether real or imagined).

There were particular moments during the campaign period when we felt that public opinion may be swinging so wildly against the PAP that Aljunied, Holland-Bukit Timah and Bishan-Toa Payoh might fall. Marine Parade was not looking very safe for the PAP nor was East Coast. These are GRCs. In the past, GRCs were the safe zones for the PAP and the opposition struggled to make a dent. In 2011, the opposition parties contested nearly all the seats and gave to the electorate an important gift: the ability to vote in the general elections. For many, it was the first time that they had a chance to vote. The opposition parties benefited from a more credible slate of candidates. The level of resentment against the PAP's policies had led to candidates with sound credentials coming forward to take up the cause of providing an alternative voice in Parliament.

Above all else, I believe the crucial development in the 2011 elections was the disappearance of fear from the minds of many voters. Perhaps, not surprisingly, this translated into a corresponding fear in the minds of the PAP candidates. The high and mighty and infallible PAP was reduced to issuing a public apology. On 3rd May 2011, at Boat Quay, we witnessed the vulnerability of the PAP and the true power of the ballot.

An important battle in the 2011 elections was fought online. It was not a straightforward battle between the PAP and the Opposition Parties. Much of the battle was waged by bloggers, websites such as The Online Citizen and Temasek Review, citizens posting on forum pages and Facebook users doing no more than clicking and sharing. The irreverance was infectious and it was curing many of the disease of fear. The online battles were crucial in averting serious damage for the opposition and in inflicting damage on the PAP. Singaporeans have grown accustomed to the reality that the mainstream media is the mouthpiece of the ruling party. Alternative sources of information were becoming more relevant to the assessment of issues thrown up during the elections. Quite tellingly, thanks to keyboard warriors, it became difficult to tarnish or trivialise opposition candidates and their policy positions.

Since it is now a year after that historic election campaign, I thought it would be good to reflect on one such online battle. During the campaign, Vivian Balakrishnan said the SDP was suppressing a video on youtube that raised "some very awkward questions about the agenda and motivations of the SDP and its candidates." He stated: "I can't help feeling that part of the reason for their (SDP) reticence is they have elements of their agenda they are not prepared to disclose and subject to scrutiny. Eventually, they will have to come out of the closet."

The phrase, "coming out of the closet" is often used in the context of a person coming forward to openly declare his sexual orientation. As it transpired, the video being referred to was one involving a speech by lawyer M Ravi. Vincent Wijeysingha of the SDP can be seen briefly in the video asking some questions. Vivian Balakrishnan's allusion was to a potential gay agenda on the part of the SDP. The perception amongst many netizens was that there was an attempt to tarnish the image of Vincent Wijeysingha by emphasizing that he is gay. A New Paper issue ran the headline: "Is Singapore ready for a Gay MP?"

The online backlash was consistent, virulent and mono-directional (against the PAP). Voters had too many fundamental concerns that needed to be addressed and netizens reflected this by displaying impatience with an attempted smear campaign against the SDP candidate. On April 28, Vivian Balakrishnan told the press that there is no need to discuss the video further.

The election campaign was marked by many instances of campaign issues being subjected to close scrutiny online. I wouldn't be overstating the case if I were to say that the 2011 General Elections was heavilly influenced by online discussion.

Today, we are engaged in discussion (initiated by the government) about a Code of Conduct for the internet. Given the fact that our laws relating to sedition, contempt of court, criminal and civil defamation and incitement to religious hatred are more than adequate to deal with some of the reasons stated for a Code of Conduct by Dr Yacoob, one can only arrive at the conclusion that the real issue for the PAP leaders is the control of information that is available online. PAP no longer enjoys a monopoly on information. The diversity of views expressed online (often in the form of intellectually sharp analysis) gives the people a very real opportunity to assess the truth for themselves. The days of an officially constructed reality are over.

Do we need a COC? No. In all likelihood this move is initiated as an attempt at information management. If that is indeed the motivation, then our leaders have not understood a key driving force behind the 'new normal'. So, here is some free advice: We don't want to be told. We want to make up our own minds.

Wednesday, April 25, 2012

Pri 1, PR, proximity and the need for principles in policy making

On 25th March 2012, the Ministry of Education announced some changes to the Primary 1 registration exercise. Basically, there will be no changes to the current phases of registration. But, there would be differentiation between Singapore Citizens and Permanent Residents where a particular phase is 'oversubscribed'. MOE's press release states this:

"when balloting is necessary in a specific phase, SCs will be given absolute priority over PRs. SCs and PRs will continue to be eligible for the same phases, and all applicants will be admitted if the total number of applicants in any phase does not exceed the number of vacancies. However, if the number of applications exceeds the number of vacancies in a specific phase, SCs will be admitted first ahead of PRs, before home-school distance is considered."

This is clearly intended to win political capital by pandering to the section of the electorate that is clearly unhappy with the huge influx of foreigners. There is nothing stated by way of principle by the Ministry of Education as to why the differentiation ought to be made. There are possible ways that a principled argument could be mounted for the differentiation. But MOE does not seem to find the need to justify and I can only surmise that it is a response to electoral backlash.

In this piece I am not going to look at the need to differentiate between citizens and PRs. Instead, I wish to focus on another issue that I have been concerned about for some time: the lack of principles in the primary 1 registration exercise. The Pri 1 registration exercise is split into a number of phases. Each phase caters for different categories of 'interests'.

Phase 1
For a child who has a sibling studying in the primary school of choice

Phase 2A(1)
(a) For a child whose parent is a former student of the primary school and who has joined the alumni association as a member not later than 30 June 2011.

(b) For a child whose parent is a member of the School Advisory / Management Committee

Phase 2A(2)
(a) For a child whose parent or sibling has studied in the primary school of choice

(b) For a child whose parent is a staff member of the primary school of choice

Phase 2B
(a) For a child whose parent has joined the primary school as a parent volunteer not later than 1 Jul 2011 and has given at least 40 hours of voluntary service to the school by 30 Jun 2012

(b) For a child whose parent is a member endorsed by the church/clan directly connected with the primary school

(c) For a child whose parent is endorsed as an active community leader

Phase 2C
For all children who are eligible for Primary One in the following year and are not yet registered in a primary school

Phase 2C Supplementary
For a child who is not yet registered in a school after Phase 2C

Phase 3
For a child who is neither a Singapore Citizen nor a Singapore Permanent Resident

From the first time that I became aware of the phases, I have been uncomfortable with the way in which priority is given to parents offering voluntary services to the school and parents that are deemed to be active community leaders. Under its FAQ section, the MOE explains community leaders as follows: "Current serving executive committee members of the Residents’ Committee (RC), Neighbourhood Committee (NC), Citizen’s Consultative Committee (CCC), Community Club Management Committee (CCMC) and the Community Development Council (CDC) are eligible to register their children under Phase 2B."

A crucial issue in making education available to all and accessible to all is to consider the child's interest. A young child would need all the assistance necessary to make the transition into a competitive school environment a smooth one. Distance may be a factor to be considered. If a child has to travel a long distance to and from school, precious time is lost and the child gets understandably tired. This can affect the overall concentration and performance of the child over the years. The fact that a sibling is presently studying in a particular school appears to be a relevant factor that is capable of improving the child's performance. Clearly a child is likely to benefit from the presence an older sibling in the school. These methods of giving priority can be classified as 'principled'.

What befuddles me is that someone that has joined a Residents' Committee or has helped out as a parent volunteer (and often does so out of self-interest), can easily fit into phase 2B and that person's child will be given priority over a child living in vicinity of a school. By officially maintaing a category for parents serving the community or the school, a wrong behaviour is encouraged. Community service should be undertaken with the spirit of service and not through expectation of benefits. But, the current registration system encourages many parents to join RCs simply because of the benefit of priority in pri 1 registration. Whilst proximity ought to be a superior factor in comparison to RC membership by virtue of the principled position adopted, proximity is subordinated.

If this was not official policy, it would be the offence of corruption. Parents providing volunteer services to schools do so with the expectation that their child will get priority in registration. The schools receive this benefit of services provided by the parents and know that they are expected to reciprocate. I am drawing this comparison with the corruption offence to put things into perspective. There is no principled approach to Pri 1 registration.

It is important that public bodies rationalise their policies in a principled way instead of catering to 'interests' in an arbitrary fashion.

(On a personal note: About 5 years ago, I was strongly encouraged by an active RC member to join the RC as it would enhance my son's school registration. I found the suggestion repulsive then and I still feel the same way about it today. I continue to receive the same suggestion today. My son will be going through his Pri 1 registration in the middle of next year. I refuse to give myself an advantage by joining the RC. I think that there is a more important value that I need to inculcate in my son. Sometimes, it is a matter of principle.)

Sunday, April 22, 2012

That US 4 billion to the IMF: Is it unconstitutional?

On 20th April 2012, the Monetary Authority of Singapore announced that Singapore will give a "bilateral loan of US$4 billion to the International Monetary Fund (IMF), as part of the broader international effort to provide the Fund with sufficient resources to tackle crisis and promote global economic and financial stability."

Let me just state at the outset that I am not going to question the wisdom of such a move. I can see the need for the global community to rally together to hold steadfast against any future economic crisis. Some would question whether this is nothing more than an exercise in futility. In fact, in the United Kingdom (where the government has pledged 10 billion pounds), several ruling party MPs have started questioning the wisdom of providing such a backup to the IMF. Peter Bone (MP from the Conservative Party) said: "We might as well put £10billion in the nearest litter bin.” There is a sense in which this move is seen as money down the drain and an exercise in futility even if it may appear to be well-intentioned.

The Shadow Chancellor, Ed Balls (of the opposition Labour Party) had this to say: "The IMF has a vital role to play in the global economy and should have the resources to do that job, but it should not be bailing out the eurozone when the euro area countries are not doing their own bit to help themselves." "The IMF cannot and should not become the de facto central bank of the euro area." "The IMF is being put up to step in and play the role that the European Central Bank should be playing - a strategy which cannot work and is self-defeating by highlighting the lack of a proper ECB firewall." I can see the validity in this proposition that IMF should not do ECB's job.

Meanwhile, back in Singapore, we have mundane news reports of a mere 4 billion US dollars being pledged to the IMF. I am rather curious about the status of this loan commitment from a legal standpoint. Under our Constitution, there are some restrictions on loans and guarantees provided by the government. Article 144 of the Constitution is as follows:

Article 144.
—(1) No guarantee or loan shall be given or raised by the Government —
(a)except under the authority of any resolution of Parliament with which the President concurs;
(b)under the authority of any law to which this paragraph applies unless the President concurs with the giving or raising of such guarantee or loan; or
(c)except under the authority of any other written law.
(2) The President, acting in his discretion, may withhold his assent to any Bill passed by Parliament providing, directly or indirectly, for the borrowing of money, the giving of any guarantee or the raising of any loan by the Government if, in the opinion of the President, the Bill is likely to draw on the reserves of the Government which were not accumulated by the Government during its current term of office.

The present issue of the loan to IMF comes under Clause 1(b). The Constitution makes reference to specific laws under which loans may be given and one such statute listed at Clause 3 is the Bretton Woods Agreement Act (Cap 27). Subscription payments to the IMF and other monetary commitments to the IMF are covered by the Bretton Woods Agreement. Given this fact, the Constitution clearly prohibits at Clause 1(b) above any loan given to the IMF without the President's consent.

I wonder if the President was consulted. I wonder if he has given his consent. Given that this is one of the areas of the President's discretionary powers and given the fact that he is an Elected President, I would expect some transparency and accountability here simply in the form of an official request for the President's consent and the President's communication of such consent with reasons stated. This would ensure that the people can judge the President's record when it comes to the next Presidential Election. What decisions did he make in relation to his discretionary powers? How did he justify those decisions? Are the justifications acceptable? These are important questions and can't be brushed aside on the bare assertion that our President is like the Queen of England and that he carries out his functions behind closed doors. Our President is Elected (and not appointed or a hereditary title holder) and these are part of his discretionary powers for which he was elected.

Thus I have 2 issues with the current loan to the IMF. (1) A guarantee or a loan without the President's consent will be unlawful. (2) If the President has consented, can we have an official statement from Istana?

Thursday, April 19, 2012

Can SGX be subject to judicial review?

There is a case that is presently in court over the question of whether the High Court can exercise judicial review over the decisions of the SGX.

This is an interesting legal problem that has not been addressed yet in Singapore and I am hopeful that the Court would come to the conclusion that SGX is performing a 'public function' even though it is not a public body and hence it ought to be subject to judicial review. This is the outcome of a similar litigation in the UK involving the powers of the Panel on Takeovers and Mergers. In the cases of R v Panel on Take-overs and Mergers, ex parte Datafin plc and another, the English Court of Appeal came to the conclusion that the Panel was performing a public function and therefore subject to judicial review by the courts.
Sir John Donaldson MR made the following observation about the Panel:
"It has no statutory, prerogative or common law powers and it is not in contractual relationship with the financial market or with those who deal in that market.

Lacking any authority de jure, it exercises immense power de facto by devising, promulgating, amending and interpreting the City Code on Take-overs and Mergers, by waiving or modifying the application of the code in particular circumstances, by investigating and reporting on alleged breaches of the code and by the application or threat of sanctions. These sanctions are no less effective because they are applied indirectly and lack a legally enforceable base."

The Court of Appeal in that case went on to conclude that the Panel was fulfilling a regulatory function that would have otherwise been fulfilled by the state. The fact that it was a wholly private entity did not prevent the Court from exercising its judicial review powers over the Panel.

It would be interesting to see how our Courts would deal with the SGX. It is strongly arguable that SGX's regulatory functions place it within the ambit of a body that is subject to judicial review by the courts.

The following article appeared in Business Times:

Is it a public body issuing reprimands or a private club?

[SINGAPORE] Is the Singapore Exchange (SGX) a public body exercising a public function when reprimanding companies and their directors? Or is it a private club, dealing with its members?

The question was hotly debated yesterday after a former independent director (ID) of China Sky Chemical Fibre sought to have a public reprimand from SGX overturned by the court.

SGX is "not a creature of statute" and its relationship with listed companies is a contractual one, said Davinder Singh, chief executive officer of Drew & Napier LLC, who represented the Exchange.

Its power to reprimand companies or directors is not subject to judicial review since it is rooted in private law, he added.

Tan Cheng Han, a consultant at TSMP Law Corporation, contested this view. "To the extent that the Exchange is exercising a power that is inherent or necessary for the proper regulation of the securities market in Singapore, it is exercising a power of public character," he said.

The two Senior Counsels locked horns on the grey area of SGX's dual commercial and regulatory roles yesterday in court in an unprecedented lawsuit brought by a former director of a listed company against SGX.

Yeap Wai Kong, former ID of China Sky, wants to overturn a public reprimand from SGX through a quashing order from the court. The company and its directors were publicly rapped on Dec 16 after the group's failure to comply with SGX's directive to appoint a special auditor.

SGX's hybrid nature has long been a source of market debate but the lawsuit has probably brought the discussion on the source of its powers in court for the first time.

Representing SGX, Mr Singh stressed that SGX's position is different from that of the Monetary Authority of Singapore (MAS), which is a statutory body that regulates the securities market and SGX itself.

Under Singapore's "unique framework", companies that seek to be admitted into the official list enter a "consensual submission" to abide by SGX listing rules.

SGX's power to reprimand arises because "the Company and the Applicant (Mr Yeap) both agreed to be bound by the Listing Rules, thereby consensually submitting to the Exchange's power under Listing Rule 720(4) to issue the Reprimand", Mr Singh said in his written submissions for SGX.

"Like any other private club, the Exchange has rules governing the conduct of its members, and seeks to ensure compliance with its rules. This does not lead to the conclusion that the Exchange was exercising a public function in issuing the reprimand."

Companies are obliged to abide by SGX rules and they can say "no" to any SGX directive only through the Board, he added. Mr Singh pointed out that announcements by China Sky rejecting SGX's directive were issued "by order of the Board" and there was no evidence that Mr Yeap had disagreed with them.

"Distinction between the Board and its directors is an artificial one," he said. "To say that there is a need for notices to be issued to individual directors is a weak point".

Judicial review is a review of the manner in which a body makes a decision. In a judicial review, the court is concerned not with the merits of a decision but the process by which that decision has been made.

Representing Mr Yeap, Mr Tan argued that since the court has already decided that it has jurisdiction to hear this case, the decisions made by SGX are susceptible to judicial review.

"A hybrid body like SGX that discharges a public function is under the obligation to act judicially or fairly," he said, adding that SGX did not give Mr Yeap an opportunity to be heard before issuing a public reprimand on him, hence breaching natural rules of justice.

"I can find no piece of correspondence or a phone call from a SGX representative to the applicant to say that it is issuing a public reprimand to him and 'please explain yourself'," Mr Tan argued.

Neither was there a show-cause letter to Mr Yeap, similar to the ones issued to China Sky and another independent director at that time, Lai Seng Kwoon.

Mr Singh argued, however, that a show-cause letter was issued separately to Mr Lai because he was asked to explain his personal role in the interested person transactions with China Sky and his potential conflict of interest as chairman of the audit committee.

SGX had in January applied to the court to compel China Sky to comply with its directives, but executed a sudden withdrawal of its court application within two weeks without any reasons given.

"I find it strange that the respondent (SGX) is not pressing the company now to appoint auditors but is allowing the public reprimand to stand," Mr Tan said.

Mr Yeap was appointed to China Sky's Board in May last year before quitting on Jan 12 with two other IDs, Er Kwong Wah and Mr Lai, citing the company's non-compliance with SGX's order.

The Commercial Affairs Department is now probing Fujian-based fibre maker for possible breaches of securities laws after a number of irregularities were flagged by SGX.

MAS has also sought a court order to freeze the assets in Singapore belonging to the former chief executive of China Sky, Huang Zhong Xuan.

Thursday, April 12, 2012

The Houngang by-election case - The decision to grant leave

Justice Philip Pillai has given his written reasons for the decision to grant leave for judicial review in the case of Vellama d/o Marie Muthu v AG.

Having read the court's reasoning, what I can gather is that the judge has stated that he is satisfied that the 'low threshold' for granting leave has been crossed. Exactly why the Court is satisfied as such is not stated (or at least I can't find it.

In his conclusion, the judge states:

"Based on what was presented and submitted to me for the purposes of the leave application, without making any comment or decision on the merits or the substantive legal issues, I granted leave for a judicial review hearing as I was of the view that the very low threshold for leave has been met."

I suspect that this might be a problem during the appeal. What was the judge's reason for coming to the 'view that the very low threshold for leave has been met?

Paragraphs 1 to 3 of the decision set out the orders sought by Applicant (Ms Vellama) and the fact that the Court granted leave for judicial review on 2nd April 2012.

Paragraphs 4 to 8 set out the factual background to the application.

Paragraphs 9 to 13 set out the law relating to the threshold to be crossed for the granting of leave for judicial review. The law here is uncontroversial and it is as follows:
(i) the matter complained of is susceptible to judicial review;
(ii) the applicant has sufficient interest in the matter; and
(iii) the material before the court discloses an arguable or prima facie case of reasonable suspicion in favour of granting leave.

Points No.(i) and (ii) were not disputed. The issue before the court was, therefore, whether there's a "prima facie case of reasonable suspicion"

Paragraphs 14 to 16 deal with the relationship between Order 53 and Order 15 Rule 16. This relates to the question of whether leave for judicial review is required for declaratory orders (as opposed to mandatory orders for which leave is clearly required). (A declaratory order is one that is in the form of a clarification of the legal position without ordering any government body to do anything. A mandatory order requires the government body to comply with the court's direction to carry out a particular act.)

The discussion in these paragraphs did not relate to the issue of whether there was a "prima facie case of reasonable suspicion." It was more on the question of whether leave was required in the first place for the declaratory orders.

Paragraphs 19 to 23 involve a narration by the judge of the arguments put forward by the respective lawyers on the mandatory order sought by the applicant. The judge did not express his opinion on these arguments.

Paragraphs 24 to 27 involve a narration of the arguments by the parties on the declarations requested by the applicant. The judge states the following:
"Counsel for the applicant earlier informed the AG’s counsel and the court that he would if necessary immediately apply under O 15 r 16 for the First and Second Declarations to be considered as standalone declarations for which the leave of court is not required. In light of this, the question of whether the quite separate requirements for standalone declarations have been
met would have to be determined at a substantive hearing, which this O 53 leave hearing is not."

The judge therefore appears to have taken the view that the issue of leave requirement for the declaratory orders did not need to be addressed.

Finally, at paragraph 29, the Judge concludes:

"Based on what was presented and submitted to me for the purposes of the leave application, without making any comment or decision on the merits or the substantive legal issues, I granted leave for a judicial review hearing as I was of the view that the very low threshold for leave has been met."

I am unable to ascertain from the decision the specific reason that led to his assessment that the "low threshold for leave has been met" apart from his assertion that the threshold has been met (Unless, one is to assume that he accepted the arguments put forward by the Counsel for the appellant and that constituted his reason for stating that the low threshold had been met.)

I hope that the Court of Appeal does not find this problematic. To be fair, the judge has no duty to examine the substantive merits of the application. But, I would have expected that something was stated as to why he made the finding that the threshold had been met.