Suggestions on the relevance of the Organization's Size to Section 11 of Singapore's Personal Data Protection Act

By Foo Ee Yeong Daniel

I. INTRODUCTION

Singapore’s Personal Data Protection Act1 [PDPA] has been in effect since four years ago,2 and serves to balance the protection of individuals’ personal data with the ‘need of organisations to collect, use or disclose personal data for purposes that a reasonable person would consider appropriate in the circumstances’.3 Since then, the Personal Data Protection Commission [PDPC], with the help of public consultations,4 has continually revisited and augmented5 the PDPA’s various advisory guidelines.6

The PDPA stipulates various obligations, which organisations should fulfil based on ‘what a reasonable person would consider appropriate in the circumstances’, as per section 11(1) of the Act (the “reasonableness test”). This standard of reasonableness underpins the standard of compliance for all obligations under the PDPA,7 and the Advisory Guidelines on Key Concepts in the PDPA8 [Guidelines] clarifies that this applies to all private organisations9 as defined in section 2, regardless of their size.

This article aims to explore the relevance of an organisation’s size to the PDPA’s reasonableness test, and submits that the former should be considered as a factor in applying the latter. This may be done, for instance, by providing for it in the Guidelines.

II. MINIMAL SCOPE FOR SIZE IN THE PDPA’S REASONABLENESS TEST

Currently, the size of the organisation appears to be contemplated only by the Protection Obligation – when determining whether reasonable security arrangements have been made to prevent unauthorised handling of personal data under section 24 of the PDPA. This is seen from the Guidelines, which provide only general guidance for compliance10 and mention the size of the organisation only once: as a factor in risk assessment exercises determining whether information security arrangements are adequate.11 Otherwise, the PDPA legislation and jurisprudence do not feature the size of the organisation in applying the reasonableness test for any other obligation. There does not appear to be any debate on this issue; one can only guess that the drafters of the PDPA believed that fulfilling these other obligations was more important than the strain of compliance on organisations and/or that the obligations were generally undemanding for organisations that already had strong data protection practices. In any case, the PDPA prevents organisations from invoking their small size to unjustifiably exempt themselves from obligations to protect personal data.

Instead, the reasonableness of measures appears to turn on the impact on the individual whose personal data is mishandled and the compliance measures themselves. For example, the Accuracy Obligation under section 23 considers, inter alia, the nature of the personal data,12 as well as the impact on the relevant individual should the data be inaccurate.13 Another example is the Notification Obligation under section 20, which considers the ‘circumstances and manner in which [the organisation] will be collecting the personal data’,14 the ‘frequency at which the personal data will be collected’15 and ‘the channel through which the notification is provided’.16 The size of the organisation does not appear to feature in the reasonableness test for any of the obligations under the PDPA, except for in the Protection Obligation.

III. ORGANIZATIONAL SIZE SHOULD BE A FACTOR

As a result of the above, the reasonableness test arguably fails to take into account the resource-scarce reality of many small organisations when determining whether they have discharged their obligations to a ‘reasonable’ standard under the PDPA. One example is where an organisation transfers personal data to its parent company overseas, and has to fulfil its Transfer Limitation Obligation under section 26 of the PDPA. The Guidelines suggest that the organisation reviews the corporate rules binding both organisations and assesses that they comply with these regulations, as well as that the data protection is ‘comparable to the standard under the PDPA’.17 This envisages studying rules, designing and executing appropriate transfers, as well as deciding whether corporate practices sufficiently comply with legislation – all difficult processes that require a certain amount of manpower or at least expertise that small organisations will not be as privy to as large ones. Except for in the Protection Obligation, the PDPA’s current reasonableness test essentially demands the same standard of compliance from the sole proprietor as that from the large, multinational company. This raises issues of resource inequality and disadvantage to small organisations, for which sustainability is already a challenge without the PDPA.

Considering the organisation’s size when applying the reasonableness test would better accord with the plain meaning of ‘reasonableness’. It appears unreasonable, in the barest and most layman sense of the word, to expect small organisations to comply with the PDPA as rigorously as large organisations. Then-President of the Singapore Chinese Chamber of Commerce and Industry, Mr Teo Siong Seng, emphasised during the Second Reading of the Personal Data Protection Bill that small organisations would struggle more with manpower, time-related and even consultancy costs of compliance with the PDPA.18 SMEs have since reportedly had to grapple with ‘overburdened staff’19 and five-figure costs on ‘new procedures, staff training and the upgrading of technology]’.20 In particular, the obligation to ‘develop and implement policies and practices that are necessary’ to comply with the PDPA, as per section 12(a) of the Act, is manifestly more difficult for small organisations than it is for large ones. Taking into account an organisation’s size would achieve better approximations of what a ‘reasonable person would consider appropriate in the circumstances’. This would in turn produce more practical benefits: guiding the PDPC to achieve fairer adjudicative outcomes – ensuring that small organisations are not penalised for failing to take compliance measures beyond their means.

Further, having regard for the size of the organisation would better achieve the PDPA’s purpose of mitigating compliance costs.21 Organisations should save costs when implementing essential PDPA-compliant processes, as doing so guards against actionable, personal data breaches ‘under other statutes, at common law and equity’.22 This helps organisations save costs on litigation and compensation, which would be greater than the costs incurred for compliance with the PDPA. However, as the PDPA’s reasonableness test now apparently does not accommodate the inherent differences between small and large organisations, small organisations may find themselves tending toward the safest practices or ‘best solution[s]’ adopted by large organisations, which may be too costly for them.23 Recognising that the size of the organisation should affect what is considered ‘reasonable’ compliance would give a green light to small organisations and their consultants (if they can afford any) to exercise latitude in adopting more cost-efficient practices that would still comply with the PDPA.24

Considering the organisation’s size would also better achieve the PDPA’s purpose of enhancing Singapore’s business competitiveness.25 Holding small organisations to the same standard of ‘reasonableness’ as large organisations in complying with the PDPA has deleterious effects on the former’s operations.26 This is because compliance with the PDPA requires a large amount of time, cost and effort that could otherwise be invested productively into the organisation’s operations.27 Such resource-demanding measures include studying the PDPA, appointing a Personal Data Officer,28 developing policies and practices for compliance29 that must be then communicated to staff,30 as well as training staff to receive and respond to PDPA-related inquiries and complaints.31 This has arguably even worse consequences for small social service organisations, which already struggle to make the most of their resources to perform their charitable works. Imposing the reasonableness test for compliance – without considering their sizes – risks impeding the good work of these organisations and generally inhibiting the progress of Singapore’s social service sector – a result that is normatively undesirable. A reasonableness test that accounts for the organisation’s size would encourage small organisations to consider practices that are less operationally disruptive than those that large organisations adopt but would still comply with the PDPA. Such would not only facilitate the Act’s aim of business productivity and competitiveness, but also the socially desirable aims of various social service organisations.

IV. THE DANGERS OF CONSIDERING ORGANIZATIONAL SIZE

The dangers of considering an organisation’s size in applying the reasonableness test may be observed from the effects of Australia’s Privacy Act 198832 [APA], which makes exemptions for small businesses.33 This ‘small business exemption’ has been heavily criticised, and the Australian Law Reform Commission even recommended its repeal in 2008.34 In particular, it has been argued that organisational size is unrelated to the risk of personal data breach; such depends instead on the nature of the data, its handling and the organisation’s operations.35 There have been concerns that the APA may be abused by small organisations, which are given a statutory backdoor to misuse personal data in the name of cost-effectiveness.36

Including the organisation’s size as only a factor in the PDPA’s reasonableness test would be an appropriately moderate approach that mitigates the risk of completely exempting small, rogue organisations. In fact, as suggested, the organisation’s size could be mentioned as a factor only in the Guidelines. Since the Guidelines are ‘advisory’ and ‘do not constitute legal advice’,37 this would mitigate the risk of giving small organisations carte blanche to breach the PDPA – holding small organisations to baseline standards of compliance. The non-conclusive status of a ‘factor’, as well as the non-binding nature of the Guidelines, also collectively preserve the PDPC’s ability to find PDPA breaches regardless of the organisation’s size. The only difference would be that the PDPC should be persuaded to weigh the small size of the organisation as one of many factors in deciding whether there is a breach of the Act.

V. MOVING FORWARD: CHALLENGES IN DEFINING ‘SIZE’

In sum, an organisation’s size should be considered as a factor in the PDPA’s reasonableness test as such better accords with the plain meaning of ‘reasonableness’, as well as better achieves the Act’s purposes of enhancing Singapore’s business competitiveness while managing compliance costs.

Having explored the legal and normative justifications of incorporating the organisation’s size as a factor in the PDPA’s reasonableness test, this article notes that defining ‘size’ has proven and can be expected to be tricky. The Australian Privacy Act’s definition of a ‘small business’ may be used as a case study. It sets out what would and would not qualify for the exemption, and has two significant features: first, it pegs ‘size’ primarily to the organisation’s annual turnover.38 Second, it adopts a binary view of what would be ‘small’ and not. Suggestions have been made to raise the Privacy Act’s turnover threshold, to account for inflation.39 There have also been suggestions to base the definition instead on specific levels of risk 40 or simply the number of employees in the organisation.41 Each of these has attracted its criticisms.

Thus, careful thought should be given as to what definition of ‘size’ would be a suitable factor in the PDPA’s ‘reasonableness’ test, considering the Act’s aim of promoting business competitiveness and data protection while moderating compliance costs. These, as well as other matters related to how the size of the organisation may or should affect its compliance obligations, should also be further considered.


[1] Personal Data Protection Act (No. 26 of 2012).

[2] According to the Personal Data Protection Commission of Singapore, “Legislation and Guidelines”, online: <https://www.pdpc.gov.sg/legislation-and-guidelines>, ‘[t]he PDPA took effect in phases starting with the provisions relating to the formation of the PDPA on 2 January 2013. Provisions relating to the DNC Registry came into effect on 2 January 2014 and the main data protection rules on 2 July 2014.’

[3] Supra note 1 at s 3.

[4] A useful repository of these consultation papers may be found at the Personal Data Protection Commission of Singapore, “Public Consultations”, online: < https://www.pdpc.gov.sg/legislation-and-guidelines/public-consultations>.

[5] Singapore Parliamentary Debates, Official Report, vol 93 (10 March 2015) (Assoc Prof Dr Yaacob Ibrahim).

[6] Supra note 1 at s 49(1) states that the ‘Commission may, from time to time, issue written advisory guidelines indicating the manner in which the Commission will interpret the provisions of this Act’.

[7] These may be broadly labelled as the Consent Obligation, Purpose Limitation Obligation, Notification Obligation, Access and Correction Obligation, Accuracy Obligation, Protection Obligation, Retention Limitation Obligation, Transfer Limitation Obligation and Openness Obligation. This article will look at only a few of these obligations, mostly for illustrative purposes.

[8] Personal Data Protection Commission of Singapore, “Advisory Guidelines on Key Concepts in the PDPA” (revised 27 July 2017).

[9] Ibid at 6.3.

[10] Personal Data Protection Commission of Singapore, “Introduction to the Guidelines” at para 3.3.

[11] Supra note 8 at 17.4(a).

[12] Ibid at 16.4(a).

[13] Ibid at 16.4(e).

[14] Ibid at 14.10(a).

[15] Ibid at 14.10(c).

[16] Ibid at 14.10(d).

[17] Ibid at 19.4.

[18] Parliamentary Debates Singapore: Official Report, vol 89 (15 October 2012) (Nominated Member, Mr Teo Siong Seng). Mr Teo spoke as then-President of the Singapore Chinese Chamber of Commerce and Industry, ‘representing 4,000 corporate members and 145 trade associations from a great diversity of trades, industries and service providers’.

[19] The Straits Times, “Privacy Act sows confusion”, online: < http://www.todayonline.com/commentary/privacy-act-sows-confusion>.

[20] The Straits Times, “Early childhood educator simplifies personal data protection requirements”, online: <http://www.straitstimes.com/business/companies-markets/early-childhood-educator-simplifies-personal-data-protection-requirements>.

[21] Singapore Parliamentary Debates, Official Report, vol 89 (15 October 2012) (Minister for Communications and Information, Associate Professor Dr Yaacob Ibrahim).

[22] Hannah YeeFen Lim, Data Protection in the Practical Context: Strategies and Techniques (Singapore: Academy Publishing, 2017) at 1.2.

[23] Supra note 19.

[24] It is interesting to note that organisations are already advised to consider their size in deciding appropriate audit processes, as per Alat Sheela, Role Of Audit In Your Organisation’s Personal Data Protection Act 2012 Compliance Programme, Personal Data Protection Digest (Singapore: Academy Publishing, 2017) at 10. It is submitted that this should be the case for all forms of compliance practices.

[25] Supra note 22.

[26] This was recently alluded to in Parliamentary Debates Singapore: Official Report, vol 94 (6 March 2017) (Member of Parliament, Mr Saktiandi Supaat): the need to protect personal data has made it ‘more difficult’ for businesses to ‘use data innovatively and optimize business opportunities’.

[27] Supra note 19.

[28] This is an extension of the PDPA’s obligations; supra note 1 at s 11(3).

[29] Ibid at s 12(a).

[30] Ibid at s 12(c).

[31] Ibid at s 12(b).

[32] Privacy Act 1988 (Cth).

[33] Ibid at s 6C.

[34] See Recommendation 39-1 in Australian Law Reform Commission, “Australian Privacy Law and Practice Report 108” at p 53.

[35] Ibid at 39.26.

[36] A more detailed analysis of the Privacy Act 1988’s ‘small business exemption’ may be found in Supra note 35.

[37] Supra note 10 at 3.1.

[38] Supra note 32 at s 6D.

[39] Supra note 34 at 39.124.

[40] As determined by the type of data and number of individuals about whom data is held; Ibid at 39.126.

[41] Ibid at 39.129.


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New Sentencing Principles for Rape – An Analysis of Ng Kean Meng Terence v Public Prosecutor

By Benjamin Low

I. INTRODUCTION

What is the most appropriate sentence that should be meted out onto an accused person who has been found guilty of the offence of rape?

The apparent simplicity of this question belies powerful, and oftentimes conflicting, sentencing policy considerations and more abstract questions of ethical principles and sentencing theory. The recent case of Ng Kean Meng Terence v Public Prosecutor1 [Ng Kean Meng Terence] is the Singapore Court of Appeal’s latest attempt at creating a new, comprehensive sentencing framework for rape in order to address the above quandaries. This article seeks to analyse the state of the law prior to Ng Kean Meng Terence and discusses the implications and effects of the case on the criminal law.

II. BACKGROUND

Prior to Ng Kean Meng Terence, the law on sentencing for rape offences was encapsulated in Public Prosecutor v NF2 [NF]. In NF, V K Rajah J (as he then was), formulated a new sentencing framework (the “NF Framework”) that was meant to replace the earlier sentencing guidelines in the earlier case of Chia Kim Heng Frederick v Public Prosecutor3 [Frederick Chia].

Under the NF Framework, rape cases were divided into four categories, each with a minimum sentence of imprisonment and caning of differing degree.4 The NF Framework may be briefly summarised as follows:

  1. Category 1 – Cases with no aggravating and/or mitigating factors with a starting sentence of ten years imprisonment and not less than six strokes of caning.
  2. Category 2 – Cases with any one of the seven aggravating factors listed in NF, such as where rape that is committed by two or more persons acting in concert; or where the offender is in a position of responsibility towards the victim.5 For such instances, the starting sentence would have been fifteen years imprisonment and twelve strokes of the cane.
  3. Category 3 – Cases where the victim is raped on multiple occasions, or where rape is perpetrated on multiple victims. This category shares the same sentencing benchmark as a Category 2 case. Rajah J justified this on the basis that the Prosecution would normally prefer multiple charges against the offender, thereby leading the courts to order that two or more of the sentences imposed run consecutively, thereby resulting in a higher sentence meted out.6
  4. Category 4 – Cases where the offender has “manifested perverted or psychopathic tendencies or gross personality disorder, and where he is likely, if at large, to remain a danger to women for an indefinite time”.7 In such cases, the maximum sentence of twenty years imprisonment and twenty-four strokes of the cane would be handed out.

Ideally, the NF Framework operates by having the Court first determine the category under which the particular rape offence should be placed, followed by the Court then adjusting the benchmark sentence upwards or downwards to take into account the additional aggravating and mitigating factors disclosed on the facts.8

The NF Framework was first considered and approved of by the Court of Appeal in the context of rape simpliciter in Public Prosecutor v Mohammed Liton Mohammed Syeed Mallik.9 It was subsequently applied by the Singapore courts to a wide range of cases involving rape committed in various permutations and factual situations.10

III. PROBLEMS WITH THE NF FRAMEWORK

Notwithstanding the durability and versatility of the NF Framework over the past eleven years, the Court of Appeal in Ng Kean Meng Terence noted that problems remained with the NF Framework that, in its opinion, necessitated a revision of the sentencing law on rape. These were, firstly, that the categories laid down in NF were themselves not properly defined – to the extent that some of the categories served no clear purpose.11 Category 3, for example, was defined in NF as encompassing cases involving the repeated rape of the same victim or rapes committed by a single offender on multiple victims. However, given that the Criminal Procedure Code12 requires that (and tying in with longstanding prosecutorial practice) separate and multiple charges be pressed against an accused person based on the facts disclosed13 and separate sentences imposed for each charge which the accused person is convicted of,14 this appeared to remove the need for a separate Category 3 to deal with multiple offending under the NF Framework.

A second, more pressing problem, was the lack of conceptual coherence with which the Category 2 aggravating factors were included inside Category 2. While it is not possible to list out all the Category 2 aggravating factors here, the Court of Appeal noted with disquiet that “[T]here does not appear to be any conceptual unity or discernible unifying theme”15 underlying the inclusion of these factors and the exclusion of others. While Rajah J no doubt intended that the list of Category 2 aggravating factors themselves be complemented with the additional aggravating factors and/or mitigating factors of each specific case, there is considerable weight in the Court’s criticisms with regards to the admittedly unclear criteria on which the Category 2 aggravating factors were based on.

The final nail in the coffin was the Court of Appeal’s finding that the NF Framework did not properly account for the statutory aggravating factors already present in the Penal Code. Section 375(3) of the Penal Code16 provides for a minimum sentence of 8 years imprisonment and 12 strokes of the cane if an offender either (a) voluntarily causes hurt to a victim or any other person in order to commit or facilitate the commission of rape; (b) puts the victim in fear of death or hurt to herself or any other person in order to commit or facilitate the commission of rape; or (c) rapes a victim under 14 by having sexual intercourse with her without her consent. None of these factors are included in the Category 2 aggravating factors within the NF Framework. In the Court’s opinion, there was a need to clarify the relationship between the two groups of aggravating factors.

IV. THE NG KEAN MENG TERENCE SENTENCING FRAMEWORK

Having opted to do away with the NF Framework, the Court in Ng Kean Meng Terence embarked on the difficult task of developing a new sentencing framework (the “Ng Kean Meng Terence Framework”) for the offence of rape. After considering past approaches by the courts in the preceding case law, the Court of Appeal rejected these approaches as unsuitable and opted to adopt the framework developed in the New Zealand case of R v Taueki.17

Generally speaking, the Ng Kean Meng Terence Framework operates in two steps:18

  1. Firstly, the court should identify which sentencing band the offence in question falls within by taking into account the offence-specific factors in the case. Once the sentencing band has been identified, the Court should then determine where within the aforementioned band the present offence falls in order to derive a sentence for a starting point.
  2. Secondly, the court should then consider the aggravating and mitigating factors which are personal to the offender to calibrate the appropriate sentence for the offender.

Step 1. Classification of the Offence

The Court of Appeal stressed that only “offence-specific” factors which relate to the circumstances of the offence such as the particular harm caused, the manner in which the offence was committed, or the specific role played by the offender in the commission of a offence by a group.19 This proposition is a common-sensical one that recognises that different factual permutations of rape should attract different penal consequences.

A non-exhaustive list of offence-specific factors, drawing on existing case law, was proposed by the Court:20

  • Group Rape: Offences committed by groups of persons.
  • Abuse of position and breach of trust: Where the offender is in a position of responsibility towards the victim or in whom the victim has placed her trust by virtue of his office of employment.
  • Premeditation: Where the offender engages in some form of planning or exhibits premeditation in committing the act (e.g. through the use of drugs or engaging in predatory behaviour).
  • Violence: Actual or threatened use of violence.
  • Vulnerable victim: Whether the victim was especially vulnerable by reason of age, physical frailty, mental impairment or disorder, and/or learning disability.
  • Forcible rape of a victim below the age of fourteen.
  • Hate crime: Where the offence was committed as a hate crime, such as an expression of racial and/or religious prejudice, or in other situations where the victim has been specifically targeted by reason of her membership of a vulnerable minority group.
  • Severe harm: Severe harm inflicted on the victim such as pregnancy, transmission of a serious disease or a psychiatric illness.
  • Deliberate infliction of special trauma.

The Court of Appeal also cautioned against taking into account the two factors of (i) forgiveness by the victim towards the offender and (ii) consent given by a victim under fourteen on the basis that such factors were usually irrelevant.21 Rejecting the second factor in particular, ties in with the express wording of s 375 of the Penal Code in criminalising sex with a person under the age of fourteen.

Having regard to the offence-specific factors, the Court must then place the offence within an appropriate sentencing band.22 For ease of reference, the three sentencing bands, each with different sentencing outcomes, are laid out below:

Table_Sentenncing Bands.PNG

Once the appropriate sentencing band has been identified, the Court would then identify where precisely along the range prescribed for the band a particular sentence falls.24

Step 2. Calibrating the Sentence

Once the starting-point sentence has been identified, the Court must then consider the “offender-specific” factors of the case – that is to say, those factors which relate to the personal circumstances of the offender himself,25 rather than relating to the manner and mode of the offending. In making this distinction, it seems that the Court of Appeal was clearly seeking to prevent any double-counting of factors that could lead to an imposition of more severe sentences than would usually be the case.

The possible offender-specific aggravating and mitigating factors recognised in Ng Kean Meng Terence are as follows:26

Table_Offender-specific factors.PNG

One of the more controversial aspects of Ng Kean Meng Terence was whether pleas of guilt could constitute a mitigating factor. While this contentious point will be discussed in further detail below, it will suffice to say that the Court in Ng Kean Meng Terence was prepared to treat pleas of guilt as one of the many offender-specific mitigating factors.27

V. COMMENTARY

From the outset, it should be noted that the Ng Kean Meng Terence Framework does not constitute a fundamental or radical revision of the sentencing law for rape. What the Ng Kean Meng Terence Framework does is to improve the present sentencing framework by better delineating the different factors that courts usually consider when determining the appropriate sentence to be meted out onto the offender.

Thus the distinction between “offence-specific” and “offender-specific” factors removes the problem of double-counting while ensuring that all relevant factors in each case are taken into consideration by the courts.28 The offence-specific factors themselves have also been modified to circumvent the conceptual difficulties of the NF Framework while addressing the third problem raised as to the statutory-aggravating factors in the Penal Code.29

A second noteworthy point is the use of sentencing bands which injects greater clarity in determining the starting-point sentence. Rather than having to work from scratch at a fixed benchmark sentence under the NF Framework, sentencing courts can now better identify which Band, and thus which part of the Band, the case in question belongs to.

It bears mentioning that since the decision of Ng Kean Meng Terence, there have been some additional developments in the local case law with regards to the Ng Kean Meng Terence Framework. While it is not possible to consider these developments in great detail, they warrant a mention in this article for completeness sake. In the later decision of Pram Nair v Public Prosecutor,30 the Court of Appeal recognised that the intoxication of a victim could constitute an additional offence-specific aggravating factor though it cautioned that this factor would not necessarily manifest itself in all cases involving an intoxicated victim.31 Much would depend on the degree of intoxication in each particular case. More importantly, the Ng Kean Meng Terence Framework was transposed onto the offence of sexual assault by penetration, with three sentencing bands imposed with varying sentencing ranges.32 As a preliminary note, these developments ought to be welcomed as promoting unity in the courts’ approaches towards both types of sexual offences.

However, notwithstanding the merits of the Ng Kean Meng Terence Framework, it is submitted that the shift in the Court of Appeal’s attitude towards pleas of guilt could carry possibly adverse implications in the sentencing law towards criminal offences. Prior to Ng Kean Meng Terence, it was settled law that a plea of guilt would not entitle an offender to a sentencing discount unless it was made out of genuine remorse.33 However, the Court of Appeal has since departed from that position by recognising in Chang Kar Meng v Public Prosecutor34 [Chang Kar Meng] that a plea of guilt could constitute a mitigating factor for utilitarian reasons (i.e. it saves victims the horror of having to recount the ordeal and it saves the resources of the State if the case were to go to trial) besides the existing remorse-based justification. The Court galvanized this proposition in Ng Kean Meng Terence by citing Chang Kar Meng with approval.35

While the utilitarian considerations admittedly cannot be discounted, the Court of Appeal’s pronouncement in Ng Kean Meng Terence has the effect of suggesting that a plea of guilt will almost certainly entitle an offender to a sentencing discount as long as he pleads guilty to a charge of rape, even if the guilty plea was not motivated by genuine remorse or contrition. Though the Court later sought to clarify that guilty pleas would only be treated as one of the many mitigating factors, it is not difficult to foresee that rape offenders would be more inclined to try their luck and enter pleas of guilt in the hopes of obtaining a lighter sentence. In a Band 1 case of rape with no further aggravating factors, a plea of guilt could potentially entitle an offender to a sentence beneath the lowest threshold in Band 1. In such situations, and where the offender does not seem to have displayed genuine remorse, can it truly be said that the public interest has been effectively safeguarded or that the overriding considerations of rehabilitation and/or deterrence have been achieved?

This leads us to a more fundamental problem with the Ng Kean Meng Terence Framework in that it does not provide any real change in the sentencing law for rape. While this was no doubt the express intention of the Court of Appeal itself,36 one cannot help but feel that a golden opportunity was missed in reviewing the present sentencing law on rape and then determining whether or not the prescribed sentencing ranges ought to be revised upwards or downwards. Indeed, the lowest sentence of ten years imprisonment and six strokes of caning in Band 1 was clearly based on the earlier decision in Frederick Chia37 but this writer submits that the sentencing ranges for the various sentencing bands should be revised upwards. A stricter sentencing regime would better accord with the longstanding deterrent aspect of the sentencing jurisprudence of the Singapore courts,38 especially given a disturbing rise in sexual crimes over the past few years.39

VI. CONCLUSION

The process of determining and laying down suitable and comprehensive sentencing guidelines for various offences is a continuous and challenging effort that often requires the courts to continuously take into account broader societal and legal changes in an effort to ensure that such guidelines remain relevant and up-to-date while ensuring that the public interest is safeguarded. Since the NF Framework, the criminal law in Singapore has evolved immensely, and the Courts must continue to refine and redevelop the existing case law to account for the new legal climate.

In light of the intrinsic seriousness of the offence of rape in particular, and the difficulties that courts sometimes encounter in threshing out the most appropriate sentence, the Court of Appeal has boldly decided to revise the sentencing law for rape by devising a new sentencing framework that meets these requirements. Although it remains to be seen whether the Ng Khean Meng Terence framework is sufficiently capable of withstanding future challenges in the form of hard cases, there is much to commend the Court for its efforts in tackling what has been a most complex area of criminal law.


[1] [2017] 2 SLR 449.

[2] [2006] 4 SLR(R) 849.

[3] [1992] 1 SLR(R) 63.

[4] Supra note 2 at [20]–[21].

[5] Ibid.

[6] Ibid, at [37].

[7] Ibid, at [21]; see also R v Keith Billam (1986) 8 Cr App R (S) 48 at pp 50–51.

[8] Ibid, at [23]; see also Ng Kean Meng Terence at [10].

[9] [2008] 1 SLR(R) 601.

[10] See PP v UI [2008] 4 SLR(R) 500 and PP v AOM [2011] 2 SLR 1057.

[11] Supra note 1 at [13]–[15].

[12] (Cap 68, 2012 Rev Ed).

[13] Ibid, at s 132.

[14] Ibid, at s 306(1).

[15] Supra note 1 at [17].

[16] (Cap 224, 2008 Rev Ed).

[17] [2005] 3 NZLR 372.

[18] Supra note 1 at [39].

[19] Ibid, at [43].

[20] Ibid, at [44].

[21] Ibid, at [45].

[22] Supra note 1 at [47].

[23] See PP v Bala Kuppusamy [2009] SGHC 97 at [28]–[29].

[24] Supra note 1 at [61].

[25] Ibid, at [62].

[26] Ibid, at [64]–[65].

[27] Ibid, at [71].

[28] Ibid, at [73].

[29] Supra note 16 at s 375(3).

[30] [2017] 2 SLR 1015.

[31]Ibid, at [126]–[132].

[32] Ibid, at [158]–[159]; although, strangely, the Court held that the respective sentencing ranges for sexual assault by penetration were to be lower than that for rape.

[33] Supra note 1 at [67]; see also Rajah J’s holding in Angliss Singapore Pte Ltd v PP [2006] 4 SLR(R) 653 at [56] and [77].

[34] [2017] 2 SLR 68 at [47].

[35] Supra note 1 at [68]–[69]; see also Chia Kim Heng Frederick v PP [1992] 1 SLR(R) 63 at [20].

[36] Ibid, at [74].

[37] Supra note 3 at [20].

[38] See PP v Law Aik Meng [2007] 2 SLR(R) 814 at [18]–[19].

[39] Seow Bei Yi, “Rise in sex crimes over past 5 years: State Courts”, The Straits Times (3 April 2017), online: <http://www.straitstimes.com/singapore/courts-crime/rise-in-sex-crimes-over-past-5-years-state-courts> ; see also “Violence: Rape Victims” (24 February 2017), online: Ministry of Social and Family Development <https://www.msf.gov.sg/research-and-data/Research-and-Statistics/Pages/Violence-Rape-Victims.aspx> .


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Economic Analaysis of Law with Indian Characteristics: Shiva Shakti Sugars Ltd. v Shree Renuka Sugar Ltd [2017]

By Darren Teoh

I. INTRODUCTION

In the landmark case of Shivashakti Sugars Ltd. v Shree Renuka Sugar Ltd.1 [Shiva Shakti], the Supreme Court of India opined that the “economic analysis of law” ought to be broadly received into India, and serve as a guide to statutory interpretation. This article primarily focuses on how the Court has defined the “economic analysis of law” as it ought to be applied within India, since it differs radically from the original (American) conception of such an analysis. A brief critique of the means-ends rationality2 of the Court’s construction of the Indian “economic analysis of law” is laid out towards the end of the article.

II. BACKGROUND

A. Facts and Procedural History

The plaintiff, Shri Renuka Sugar Mills Ltd, brought a suit in the High Court of Karnataka against the defendant, Shiva Shakthi Sugar Ltd. The plaintiff argued that since the place where the defendant had set up its sugarcane-crushing factory was within 15 kilometres of its own, “as per the provisions of clause 6A of Sugarcane (Control) Amendment Order, 2006, no permission could have been given to the appellant to start its factory”. The High Court ruled in favour of the plaintiff and ordered that the defendant cease its sugar-cane crushing operations. The Court held that since the factory operated by the plaintiff was an “existing sugar factory” when the defendant had applied to set up a factory by means of an Industrial Entrepreneurs' Memorandum (“IEM”), Clause 6A’s prohibition was attracted.4 Further, the two extensions to the defendant’s IEM, made in August and December 2010 respectively, were found to be invalid since the defendant had not taken “effective steps” to justify the extensions, as per the requirements of Clause 6C. The defendant appealed to the Supreme Court of India.

B. Decision of the Supreme Court

The Supreme Court allowed the defendant’s appeal. The Court identified seven legal issues raised by the appeal, alphabetically enumerated (a) to (g),5 but only addressed two of the seven aforementioned issues, (b) and (g). It opined that the case would be satisfactorily disposed upon answering (b) and (g).6

Issue (b) pertained to whether the respondent’s factory could be brought within the ambit of Clause 6A’s prohibition as an “existing sugar factory”. This relied on a construction of Clause 6A in relation to Explanation 1 of the Sugarcane (Control) Amendment Order (“SCAO”), and an assumption that Clause 6A applies to an IEM holder retrospectively. The Supreme Court determined that the respondent’s factory was not an “existing sugar factory”. It held that the High Court had erred in recording that the requirement in Explanation 1 of Clause 6A could be met if sugarcane-crushing had occurred in any one of the five seasons. Instead, the SCAO required factories to crush sugar for five consecutive years before they qualified as “existing sugar factories”.7

Even if the High Court had not erred, there was an antecedent Issue (g) – whether the appellant’s factory should be allowed to continue its business in the interests of justice.4 The court deliberated on Issue (g) in light of the subsequent establishment and operation of the appellant’s factory, but declined to consider whether “effective steps” were taken as required by Clauses 6A, 6B and 6C of the Sugarcane Control order. Given that the appellants had spent 3 billion rupees (over 62 million Singapore dollars) on setting up the factory, provided direct employment to roughly 700 workers etc., the Supreme Court held that the appellant’s factory should be permitted to continue operating even if the lower Court had not erred and the respondent was operating an “existing sugar factory”.8

The Supreme Court’s finding on Issue (g) was grounded on a liberal approach to statutory interpretation. Although the general preference is to give effect to the plain meaning of a statutory provision, the Court retained discretion to construe the provision flexibly, where there was ambiguity as to the meaning of the words in the statute, or if the legislature had delegated discretion. If so, the provision would be interpreted in a way that would promote an outcome which was beneficial from an economic perspective.9

In exercising its discretion in constructing the provision, the Supreme Court relied on three separate, but inter-connected justifications. It first remarked that it had the duty to support the liberalisation of India’s economy and promote economic growth alongside the other branches of Government.10 Additionally, the Supreme Court opined that the “economic analysis of law” was a valid jurisprudential approach to interpretation, and noted its far-reaching influence in the United States. Even if there was a “technical violation”, the Supreme Court asserted that it had both the power and responsibility under article 142 of the Indian Constitution to bypass the strict requirements of the statute, as long as it was in the economic interests of the nation.11

III. COMMENTARY

A. Comparing Indian and American Understandings of Economic Analysis of Law

The Supreme Court observed that American courts have utilised economic analysis in multiple areas of law.12 However, American sources, notably those of Richard Posner, were only used in support of the general proposition that the potential economic effects of rulings ought to be taken into account during a court’s deliberations. Indeed, the Supreme Court categorically stated that it was not discussing the acceptability of the normative and positive theories of “economic analysis of law”.13 In referring to the terms “positive” and “normative”, the Court clearly distinguished its position from that in American nomenclature.

What then are the differences between the Indian and American understandings of economic analysis of law? Two observations can be gleamed from the judgement.

First, the Indian approach to economic analysis of law extends readily to statutory interpretation, whereas such had been mostly limited to common law decision-making in the United States. American Courts have only ventilated their adoption of economic analysis where statutes concerned were open-textured, and if it was within reasonable contemplation that the legislature had delegated law-making power to the courts. These statutes are known as “common-law statutes”, as they implicitly permit judges to develop a common-law around the statute or its particular provisions.14 An appropriate example will help bring the difference into sharp focus – Section 1 of the United States’ Sherman Act regulating anti-competitive behaviour states that any “contract, combination . . . or conspiracy . . . in restraint of trade”15 is unlawful. Such a statute would require economic analysis, because plain reading offers no guidance as to whether a specific business practice violated section 1. It would be necessary for the Court to provide further qualitative judgement as to how the section ought to apply. On the other hand, Clause 6A of the Sugarcane (Control) Amendment Order (2006) would not require economic analysis under the American approach. Where it states “…no new sugar factory shall be set up within the radius of 15 km of any existing sugar factory or another new sugar factory in a State or two or more States”16; it is evident that not much interpretation is required to understand the clause’s substantive meaning.

The second difference between American and Indian “economic analysis of law” is that in the former, the methodology of neo-classical microeconomic theory is applied in analysing and developing legal rules, and the ends sought are welfare maximization and economic efficiency. In the latter, the individual’s strict legal rights have to be balanced against the need to guarantee distributive justice through the promotion of the nation’s economic development. This is evident from the Supreme Court’s consideration of a broad range of factors including job opportunities created, the executive branch’s approval of the business venture and the large costs already incurred in coming to its decision.17 Further support for the author’s framing of the Indian approach is that the Supreme Court also remarked that “Even in those cases where economic interest competes with the rights of other persons, [the] need is to strike a balance between the two competing interests and have a balanced approach”.18

B. A Critique of the Decision’s Means-Ends Rationality

The aversion of Commonwealth and American courts towards interfering with economic policy-making by the elected branches of Government19 might not make sense in India from a legal (as opposed to ethical or political) perspective. This is because the preamble of India’s constitution describes the country as a “sovereign, socialist secular democratic republic”. Holmes’ sweeping dictum in New York v Lochner, that a “constitution is not meant to embody a particular economic theory”, does not necessarily apply in India.20

In any case, how the preamble ought to influence judicial decision-making is a matter of constitutional interpretation, which lies beyond the scope of this article. The author is content with answering a more modest inquiry, namely, “how well does the Indian approach to economic analysis of law as articulated in Shiva Shakti support the judiciary’s goal of promoting the growth and liberalisation of the economy?” In brief, because the Indian approach to economic analysis incorporates distributive justice concerns, there will necessarily be a great tension in the law when there is no confluence between the nation’s economic interest and distributive justice. In Shiva Shakti, no issue in this respect arose. Allowing the appeal maximized allocative and productive efficiency since more than enough sugarcanes were available for crushing in the area. Distributive justice was also preserved because the presumably low-income factory workers retained their jobs. But it is not difficult to imagine situations under which the Court will find itself hard pressed to sacrifice one for the other.21

Moreover, there is a real risk of a great flood of litigation swamping the courts. This is because an absence of a finer balancing test to guide lower courts in applying the “economic analysis of law” and the assertion that courts can rule contrary to the express dictates of statute will make it difficult to predict whether one’s actions are lawful in a particular factual circumstance. The author foresees that there will be an increase in litigation brought to the courts to clarify Shiva Shakti. As the Indian court system is already over-burdened by a backlog of cases,22 it is hard to see how the nation’s economic growth and liberalisation will be better promoted by a crudely fashioned approach to “economic analysis of law”. India’s Chief Justice T.S. Thakur’s observation in 2016 that that foreign investors and manufacturers are rightly concerned about the ability of the Indian judicial system to deal with disputes efficiently is apposite here.23

IV. CONCLUSION

The decision in Shiva Shakti accords with the Indian Supreme Court’s activist character, and reflects the court’s desire to promote India’s economic development. However, it is doubtful that the Court’s assumption of a larger role in economic policy-making would be an effective means of achieving that goal. This is because judges are largely appointed from legal practice or academia, and therefore lack professional training to engage in economic analysis. Additionally, no clear legal test has been set out in Shiva Shakti to balance between an individual’s strict rights under law and the nation’s economic interest. Increased litigation is expected due to the uncertainties introduced by Shiva Shakti, and this will hinder economic development. It is respectfully submitted that the judiciary’s promotion of economic growth and liberalisation in India might be better achieved by overhauling the operation of the court system instead.24


[1] [2017] 7 SCC 729

[2] Means-ends rationality is an assessment of the extent to which a course of action pursued by an agent is useful in helping it achieve its goals.

[3] Supra note 1.

[4] Interestingly, explanation 2 of Clause 6A defines a “new sugar factory” as one that is not operational, but has filed an IEM.

[5] Supra note 1 at para 22.

[6] Ibid at para 23.

[7] Ibid at para 28.

[8] Ibid at [34].

[9] Ibid at [37].

[10] Ibid.

[11] Ibid at [40].

[12] Ibid at [37].

[13] Ibid at [51].

[14] Margaret H. Lemos, “Interpretive Methodology and Delegations to Courts: Are “Common-Law Statutes” Different?”, in Shyam Balganesh ed, Intellectual Property and the Common Law (New York: Cambridge University Press, 2011) 89 at 90.

[15] The Sherman Antitrust Act, USC 15 §1(1890).

[16] Supra note 1 at [22].

[17] Ibid at [36].

[18] Ibid at [38].

[19] See R v Director of Public Prosecutions, ex parte Kebilene [1999] 2 AC 326 at 380; Lochner v New York [1905] 198 US 45 at 75; Galstaun v Attorney-General [1981] 1 MLJ 9 (HC).

[20] Lochner v New York [1905] 198 US 45 at 75.

[21] For instance, consider whether the Court would permit the privatization of a state-owned enterprise, knowing full well that the disabled at that company will be laid off, even though the current management of the state-owned enterprise have done a terrible job in increasing the company’s profits.

[22] Nirmala Ganapathy, “33 million cases waiting to be heard in Indian courts” The Straits Times (28 April 2016), online: <http://www.straitstimes.com/asia/south-asia/33-million-cases-waiting-to-be-heard-in-indian-courts>.

[23] Ibid.

[24] As Mr Lee Kuan Yew remarked in his speech delivered at the University of Singapore Law Society’s annual dinner in 1962, “The acid test of any legal system is not the greatness or grandeur of its ideal concepts, but whether in fact it is able to produce order and justice in the relationships between man and man and between man and the State”.


A PDF version of this article is available for download here.

The Use of Force Against Non-State Actors: Justifying and Delimiting the Exercise of the Right of Self-Defence

This article was kindly contributed by Ms. Wee Yen Jean, who is presently pursuing her third and final year for her Bachelors' in Law at the University of Cambridge. The Editors would like to thank her for her submission to Juris Illuminae's ninth volume.

I. INTRODUCTION

Traditionally conceived of as primarily governing inter-state relations, international legal frameworks have often struggled to accommodate non-state actors. This has posed significant challenges for the regulation of the use of force. In recent times, technological and military advancements have greatly increased the destructive potential of non-state actors,1 and “terrorist cells are unfortunately omnipresent in today’s world”.2 This necessitates a re-evaluation of the efficacy of a state-centric model in guiding the international community’s response, especially as the emergence of the Islamic State (“ISIS”) as a “global and unprecedented threat to international peace and security”3 has revived important debates about the scope and limits of the right of self-defence as a justification for the use of force by states in response to attacks by non-state actors.

Focusing on the right of individual self-defence (which is that exercised by the victim state against the aggressor), this article will first outline the status of non-state actors in this area of international law, particularly since the 9/11 terrorist attacks. Next, it will observe that the use of force by victim states in self-defence against non-state actors has been increasingly accepted, but that an additional and defensible legal basis must be found to justify the use of force within the territory of a non-consenting host state (the state from which the non-state actors are operating) in violation of its territorial sovereignty. It is submitted that, as Tsagourias4 and Paddeu5 have suggested, conceiving of self-defence as a circumstance precluding wrongfulness currently provides the neatest solution to the problem. The article will conclude by briefly considering the implications of adopting such an approach, in particular on the scope and limits of the right of collective self-defence (that invoked by third states coming to the victim state’s aid), which as yet remain unclear.

II. SELF-DEFENCE AGAINST NON-STATE ACTORS

The use of force by states is prohibited by Article 2(4) of the United Nations Charter, and this prohibition is widely regarded to be jus cogens. The main exception to this prohibition is the “inherent right of individual or collective self-defence” against an “armed attack” recognised by Article 51 of the Charter, the scope of which is (unsurprisingly) highly contentious. While the formal legal position is that the right of self-defence can only be invoked against an aggressor state, “[t]he claim that international law absolutely prohibits defensive force against non-[s]tate actors is losing legal traction” and is “increasingly difficult to sustain”.6 The right of self-defence against non-state actors has been increasingly invoked and accepted in state practice,7 even if its lawfulness has not yet been clearly established. This section will trace that development.

The International Court of Justice (“ICJ”) has maintained in its jurisprudence that an element of state involvement is required in order for a group to be considered to have launched an “armed attack”, thereby ruling out the invocation of self-defence against truly “non-state” actors. In the Case Concerning Military and Paramilitary Activities in and against Nicaragua (Nicaragua v. United States of America)8 [Nicaragua], the ICJ relied on Article 3(g) of the 1974 Resolution on the Definition of Aggression,9 and held that the definition of “armed attack” could extend to cover attacks by “armed bands, groups, irregulars, or mercenaries”, but these actors must have been sent “by or on behalf of a State”.10 Even after 9/11, the ICJ maintained that self-defence could only be invoked in response to an armed attack “by one State against another State” in its Advisory Opinion on the Legal Consequences of the Construction of a Wall in the Occupied Palestinian Territory11 [Wall].

However, this orthodox view has come under increasing strain in light of state practice since 2001, when the United Nations Security Council Resolutions 136812 and 137313 implicitly recognised the United States’ right of self-defence in response to the 9/11 attacks by Al-Qaeda, and the majority of states (including China and Russia) supported Operation Enduring Freedom against Afghanistan as a legitimate exercise of the right of self-defence. There is also a principled basis for this shift: although the legal significance of these Resolutions is not entirely clear, Judges Buergenthal and Kooijmans in Wall (albeit in a Declaration and Separate Opinion respectively) point out that neither Resolution expressly or implicitly limits the application of the right of self-defence only to attacks carried out by state actors. In fact, the contrary seems to have been the case,14 and indeed the Security Council authorised action under Chapter VII of the Charter without ascribing these terrorist acts to a particular state in Resolution 1373.15 Similarly, in his Separate Opinion in the Case Concerning Armed Activities on the Territory of the Congo (Democratic Republic of the Congo v. Uganda) 16[DRC v. Uganda], Judge Simma called for an urgent reconsideration of the restrictive reading of Article 51 of the Charter in Wall, stating that these Resolutions “cannot but be read as affirmations of the view that large-scale attacks by non-State actors can qualify as ‘armed attacks’ within the meaning of Article 51”.17

Furthermore, it could be argued that what was fatal to Israel’s claim to self-defence in Wall was that self-defence cannot be invoked by a state to justify the use of force against an attack “originat[ing] within, and not outside”,18 its own territory (in that case, the Occupied Palestinian Territory). In contrast, Resolutions 1368 and 1373 contemplate acts of international terrorism that pose a global threat to international peace and security, not just within the territory of one state. A similar observation can be made regarding Resolution 2249, which was adopted unanimously in 2015 in response to the terrorist attacks in France. Thus, as Hakimi observes, most states do in practice tolerate the use of defensive force against non-state actors; and although they are unwilling to legitimise or validate them as lawful, such operations are in practice unlikely to be condemned or treated as unlawful.19 It is submitted that, in place of the current legal grey area, a more robust and defensible legal basis must be found for the exercise of the right of self-defence in these circumstances, to lend it greater legitimacy. Any such basis must be able to justify the victim state’s violation of the territorial sovereignty of the host state in (and from) which these non-state actors are operating; and the absence of such a justification accounts for a significant part of states’ difficulty with recognising a right of self-defence against non-state actors in the first place.20 It is this issue that the next section will turn to address.

III. SELF-DEFENCE AND TERRITORIAL SOVEREIGNTY

Territorial sovereignty has long been established as a fundamental principle of the international legal order. Ruys and Verhoeven, for example, stress that state sovereignty “is and remains one of the basic pillars of international law and order and should not lightly be violated”.21 The use of force in self-defence against a non-state actor, within the territory of a non-consenting host state, thus prima facie constitutes an internationally unlawful violation of the host state’s territorial sovereignty. Such a use of force then needs to be separately justified; although Article 51 may authorise the use of force against the non-state actors themselves,22 it does not extend to the ancillary infringement of sovereignty. (For the purposes of this article, it is assumed that the non-state actors’ acts are not, in the first place, attributable to the host state itself.)

It is submitted that the suggestion (made, for example, by Tsagourias and Paddeu23) that self-defence should be conceived of as a circumstance precluding wrongfulness currently provides the neatest solution. Under this approach and, to the extent that it entails a violation of the host state’s territorial sovereignty, the exercise of self-defence would be governed and justified by Article 21 of the Articles on Responsibility of States for Internationally Wrongful Acts (“ARSIWA”)24 rather than by Article 51 of the Charter. This distinction would lend the issue greater analytical clarity. As Paddeu argues, “Article 51 and Article 21 codify different effects of the exercise of the customary right of self-defence in the legal order”. Article 51 provides the legal basis to justify the effect of self-defence on the prohibition on the use of force, whereas Article 21 would serve to preclude the “wrongfulness of an act of a State … if [it] constitutes a lawful measure of self-defence taken in conformity with the Charter of the United Nations”25 - the wrongful act in this case being the violation of the host state’s territorial sovereignty. Article 51 would therefore govern legal relations between the victim state and the non-state actor, while Article 21 would govern legal relations between the victim state and the host state.26

Although this approach has yet to be accepted by states (or the ICJ), it would provide an analytically sound and normatively defensible framework to explain why the victim state’s right of self-defence extends to allowing it to use force in a way that would otherwise constitute an unlawful violation of the host state’s territorial sovereignty. Furthermore, since Article 21 of the ARSIWA operates only to excuse the victim state’s international responsibility for its otherwise wrongful act, this leaves open the possibility of the host state requesting compensation from the victim state for damage caused in the course of its use of defensive force.27 As Tsagourias points out, this yields a “fair and proper” outcome that avoids disadvantaging the interests of the host state unnecessarily.28

IV. UNRESOLVED QUESTIONS

Notwithstanding the benefits of this approach, it raises further questions about the scope and limits of the right of collective self-defence, such as that sought to be invoked by third states like the United States and United Kingdom against ISIS on behalf of Iraq. As the ICJ made clear in Nicaragua,29 collective self-defence requires both (a) that the preconditions for individual self-defence are present, and additionally (b) that the victim state expressly requests third states to use force in its territory. Hence, while the exercise of the right of collective self-defence within the territory of Iraq (which requested via a letter to the Security Council in 2014, that the US “lead international efforts to strike [ISIS] sites and military strongholds, with [its] express consent”30) is relatively uncontroversial, the use of force against ISIS within the territory of Syria (which has vehemently objected to unrequested military intervention in its territory as a violation of international law, the Charter, and its sovereignty and territorial integrity31) is hotly disputed. As Bannelier-Christakis argues, this makes it impossible to use “intervention by invitation” as a legal basis for third states’ use of force in Syria,32 since the consent of Syria’s government has been neither sought nor obtained. Other purported justifications for intervention in these circumstances, such as the “unwilling or unable” doctrine propounded by the United States,33 also remain extremely contentious: indeed, Corten argues that such a doctrine is unlikely to ever be accepted by states, as it would lead to “a radical change in the interpretation of both the rule prohibiting the use of force and self-defence as its main exception”, and “would eventually mean the end of the collective security system enshrined in the Charter”.34

However, if Article 21 is invoked to excuse a violation by Iraq of Syria’s territorial sovereignty in the exercise of its right of individual self-defence, and if Iraq itself expressly requests third-state intervention, then this may be taken to permit the use of force by third states against ISIS on Syria’s territory in their exercise of the right of collective self-defence. Article 21 would preclude wrongfulness35 as long as the act constitutes a lawful measure of self-defence taken in conformity with the Charter, and Article 51 of the Charter does include such a right of collective self-defence. This does not seem to have yet been much discussed in academic commentary on the subject. While any use of force in self-defence is limited by the requirements of necessity and proportionality,36 such a potential expansion calls for caution, especially since - as Gray argues - the effectiveness of using force against non-state actors is itself limited,37 and may indeed be counterproductive.

V. CONCLUSION

Although the right of self-defence against non-state actors has been increasingly accepted in the practice of states, a firm legal footing for the exercise of this rightespecially when this would involve an infringement of the host state’s territorial sovereignty, as would likely be the casehas yet to be established. On one hand, established doctrines of international law have come under great strain, and compelling arguments have been made in support of the need for international law to adapt to allow effective action to be taken against evolving threats to global security.38 On the other hand, the prohibition on the use of force is a cornerstone of the international legal order, and any widening of the right of self-defence should be treated with circumspection.

Going forward, it is submitted that a two-pronged justification, involving both (a) a reading of Article 51 of the Charter that takes into account the shift in state practice and the international community’s changing security needs; and (b) Article 21 of the ARSIWA, would provide a helpful framework for analysis, albeit that this may in turn have uncertain implications. Ultimately, attention must to be paid to the practice and changing attitudes of states to the use of force in response to new and unprecedented threats; and, drawing lessons from past interventions, states claiming a right to intervene on any ground must steer clear of any (real or perceived) abuse of the exceptions to the prohibition of the use of force, if they are to be seen as acting legitimately in furtherance of international peace and security.


[1] Ruys, ‘Armed Attack’ and Article 51 of the UN Charter: Evolutions in Customary Law and Practice (Cambridge: Cambridge University Press, 2010) at 488.  

[2] Tom Ruys & Sten Verhoeven, “Attacks by Private Actors and the Right of Self-Defence” (2005) 10(3) J Confl & Sec L 289 at 312.

[3] United Nations Security Council, Resolution 2249 (S/RES/2249) (2015), at paragraph 5 of the Preamble.  

[4] Nicholas Tsagourias, “Self-Defence against Non-State Actors: The Interaction between Self-Defence as a Primary Rule and Self-Defence as a Secondary Rule” (2016) 29 Leiden J Intl L 801.     

[5] Federica I. Paddeu, “Use of Force against Non-State Actors and the Circumstance Precluding Wrongfulness of Self-Defence” (2017) 30(1) Leiden J Intl L 93.     

[6] Monica Hakimi, “Defensive Force against Non-State Actors: The State of Play” (2015) 91 Intl L Studies 1, at 4 and 30.      

[7] Supra note 5.      

[8] [1986] ICJ Rep. 14.

[9] United Nations General Assembly, Resolution 3314, Definition of Aggression (1974).

[10] Supra note 8 at [195].

[11] [2004] ICJ Rep. 136, at [139].

[12] United Nations Security Council, Resolution 1368 (2001).

[13] United Nations Security Council, Resolution 1373 (2001).

[14] Supra note 11, Declaration of Judge Buergenthal, at [6]; see also Thomas Franck, “Terrorism and the Right of Self-Defense” (2001) 95 AJIL 839-840.  

[15] Supra note 11, Separate Opinion of Judge Kooijmans, at [35].

[16] [2005] ICJ Rep. 168.

[17] Ibid, Separate Opinion of Judge Simma, at [11].

[18] Supra note 11 at [139].

[19] Supra note 6 at 30.      

[20] Supra note 5 at 3.

[21] Supra note 2 at 310.

[22] Supra note 5 at 5-6.

[23] Supra notes 4 and 5.

[24] Articles on the Responsibility of States for Internationally Wrongful Acts, annexed to UN Doc A/RES/56/83 (2002).

[25] Ibid, Article 21.

[26] Supra note 5 at 27.

[27] Supra note 4 at 824.

[28] Ibid.

[29] Supra note 8 at [199].

[30] United Nations Security Council, “Letter dated 20 September 2014 from the Permanent Representative of Iraq to the United Nations addressed to the President of the Security Council”, S/2014/691(2014) at [5].

[31] United Nations Security Council, “Identical letters dated 17 September 2015 from the Permanent Representative of the Syrian Arab Republic to the United Nations addressed to the Secretary-General and the President of the Security Council”, S/2015/719 (2015); United Nations Security Council, “Identical letters dated 29 December 2015 from the Permanent Representative of the Syrian Arab Republic to the United Nations addressed to the Secretary-General and the President of the Security Council”, S/2015/1048 (2015). 

[32] Karine Bannelier-Christakis, “Military Interventions against ISIL in Iraq, Syria and Libya, and the Legal Basis of Consent” (2016) 29 Leiden J Intl L 743, at 774. 

[33] See United Nations Security Council, “Letter dated 23 September 2014 from the Permanent Representative of the United States of America to the United Nations addressed to the Secretary-General”, S/2014/695 (2014) at [2].

[34] Olivier Corten, “The ‘Unwilling or Unable’ Test: Has it Been, and Could it Be, Accepted?” (2016) 29 Leiden J Intl L 777 at 797. 

[35] Subject to obligations under international humanitarian law and non-derogable human rights provisions: International Law Commission, “Draft Articles on Responsibility of States for Internationally Wrongful Acts, with Commentaries” (2001) at 74. 

[36] Emphasised by the ICJ in e.g. Nicaragua (supra note 8) and DRC v. Uganda (supra note 17).  

[37] Christine Gray, “The Limits of Force” (Volume 376), Collected Courses of the Hague Academy of International Law (2015) at 111.

[38] See Christian J. Tams, “The Use of Force against Terrorists” (2009) 20(2) Eur J Intl L 359.


The PDF version of this article is available for download here.

Legal Translation of Common Law Derivative Action in the Indonesian Company Act (No. 40 of 2007)

by Novritsar Hasintongan Pakpahan*

I. INTRODUCTION

Provisions for derivative actions in the Indonesian Company Act1 (the “Act”) provide shareholders with a means to act on behalf of the company, which are additional to statutory derivative actions. While the aspect of acting on behalf of the company closely parallels common law derivative actions, existing legal translations of the Act do not sufficiently explain the concept. Misunderstanding is common since there is a difference between the legal systems under Indonesian civil law2 and the common law3 contained in the Act. Legal translation is therefore necessary to understand the implementation of the legal concept of common law derivative action. The Indonesian Government has yet to issue an official English translation of its Act. Accordingly, this study focuses on more popular, frequently-used, or credible translations to both laypersons and legal practitioners. It focuses on the three translations by the UNODC, Irma Devita, and Global Business Indonesia – which have been reflected on the top 5 results of Google search4 and Alexa5 as at July 2nd, 2017.

In a prior commentary referring to Jopek-Bosiacka, the author has stressed that legal translation is not merely a translation of legal texts between two different languages, but also translates at least two different legal systems.6 Since there is no specific legal translation technique exists,7 it is apposite to consider 6 translation techniques that are often applied by Indonesian legal translators. These are: literal translation, pure borrowing, naturalized borrowing, mixed borrowing, description, and expansion.8

II. LEGAL TRANSLATION OF COMMON LAW DERIVATIVE ACTION IN INDONESIAN COMPANY ACT

There are three translations of s 97(6) of the Act for the same phrase:

Atas nama Perseroan, pemegang saham yang mewakili paling sedikit 1/10 (satu persepuluh) bagian dari jumlah seluruh saham dengan hak suara dapat mengajukan gugatan melalui pengadilan negeri terhadap anggota Direksi yang karena kesalahan atau kelalaiannya menimbulkan kerugian pada Perseroan”.9

A. The UNODC translation

The first translation by United Nations Office on Drugs and Crime (“UNODC”)10 applied literal translation throughout; this can be observed where the resultant translation maintains exactly the same sentence structure.11 For example, “…against members of Directors whose faults and negligence create damages…” is a word-for-word translation from “…terhadap anggota Direksi yang karena kesalahan atau kelalaiannya menimbulkan kerugian…” without any change towards the grammatical structure of the phrase.

However, for legal practitioners, literally translating phrases as above may cause confusion between common law derivative action and statutory derivative action. It is important to point out that there is significant difference between the two. The former is submitted by minority shareholders on behalf of the company and regulated at common law and equity, whereas the latter’s scope is ruled in a statute and wider than the former because it covers director’s duty to exercise reasonable care, skill, and diligence.12 The translation above is ambivalent as to whether a single shareholder who represents a minimum of one-tenth of entire shares is required, or whether several shareholders who represent the same proportion of shares must be gathered instead. Practitioners will be more uncertain about the separate requirements at common law and statute for submitting a derivative action on behalf of corporations.

Furthermore, the term ‘damages’ may be confused with another legal concept of ‘loss’; the former refers to compensation for damages caused, whereas the latter relates to the actual losses incurred by director of the corporations. The term ‘kerugian’, as mentioned by the Act, contained the concept of loss caused by the personal wrongdoings of director. Wilamarta even added that there should be compensation for such wrongdoings of a director as formulated in the Act.13 Therefore, the term ‘loss’, or specifically “loss caused by negligence”, would be best suited to translate the term ‘kerugian’ rather than ‘damages’ as regulated in the Act. Literal translation applied by the translator also confuses by converting “pemegang saham” into “shareholders” rather than “shareholder”, which leads the reader to assume that there must be several shareholders to allow any shareholder to submit a derivative action. It is important to note the use of “pemegang saham” in the plural form rather than singular form because it would be difficult and rare for a single shareholder to have 1/10 (one-tenth) of entire shares in reality. That is why the translators, lay persons, and legal practitioners do not really differ the singular or plural form of “pemegang saham” and would immediately assume “pemegang saham” in plural form instead of singular form. Hence, although the translation by UNODC can be considered generally sufficient for use, it is submitted that there is room for improvement to prevent these misunderstandings.

B. Irma Devita’s translation

The second translation by Irma Devita14 uses literal translation and explicitation. Firstly, the translator chose to use literal translation to translate half of the sentence. This choice of literal translation can be observed from the similar grammatical structure of the translation. For example, “…representing at least 1/10 (one tenth) of the total number of shares with voting rights may file suit…” is a literal translation from “…mewakili paling sedikit 1/10 (satu persepuluh) bagian dari jumlah seluruh saham dengan hak suara dapat mengajukan gugatan…”. Also, as observed in the UNODC translation above, Irma Devita prefers to use ‘shareholders’ to translate ‘pemegang saham’ rather than using only ‘shareholder’. This is similarly germane to confusion among legal practitioners regarding the minimum number of shareholders required to apply for derivative actions, which could be a shareholder or several shareholders as long as they represent 1/0 (one-tenth) of the entire shares with voting rights.

However, Irma Devita used explicitation to clarify the term ‘kerugian’. The term ‘kerugian’ has two possible literal interpretations in Indonesian which are separate legal concepts; it may refer either to damages caused by personal wrongdoing, or losses as a part of operational cost of a corporation. Accordingly, the phrase “… menimbulkan kerugian pada perusahaan…” has two literal translations, namely: “… create damages to a corporation” or “… create losses to a corporation”. Irma Devita chose to use the latter phrase referring to ‘losses’ so as to explicate the ambiguous translation of the term ‘kerugian’. This employment of explicitation adds information of the source-text which is implied in the text.15 Similarly in the next part of the sentence, Irma Devita’s translation maintains the reference to losses, and selects the phrase ‘… give rise to the losses…[emphasis added]”. This is likewise a form of explicitation: it accurately connotes that a member or director’s fault or negligence is more relevant for consequential losses caused by it, and not merely every loss suffered by the company. Companies may well incur losses as a result of technical operations, which are separate from those caused by their member or director. This translation not only shows that the translator has a strong understanding of a company’s technical operations, but is also more helpful for legal practitioners where it defines which losses they may bring a derivative action for the true requirement for derivative actions.

C. Global Business Guide Indonesia’s translation

The third translation by Global Business Guide Indonesia16 uses literal translation and modulation. The use of literal translation techniques can be observed where the first half of a sentence is translated word-for-word: “… representing at least 1/10 (one-tenth) from the total number of shares with voting right, may submit a claim to a District Court…” literally translates to “…mewakili paling sedikit 1/10 (satu persepuluh) bagian dari jumlah seluruh saham dengan hak suara dapat mengajukan gugatan melalui pengadilan negeri…”. Similar to the previous translators, Global Business Guide Indonesia chose to use ‘shareholders’ to translate ‘pemegang saham’ rather than using only ‘shareholder’. This literal translation may ease the work of translators easily without changing the essential meaning of the formulation of the section of the Act.

The difference, however, is that Global Business Guide Indonesia also employs modulation to translate this section. Modulation helps readers understand the extended meaning of the sentence’s concept by changing the point of view.17 This can be seen from the translation of “…terhadap anggota Direksi yang karena kesalahan atau kelalaiannya menimbulkan kerugian…” to “…against member of the Board of Directors which causes loss to the Company due to their fault or negligence.” In contrast, a literal translation such as that used by UNODC would be “…against members of Directors whose faults and negligence create damages…” Modulation here aids in understanding this concept by directly indicating the relevant party whose fault or negligence has caused loss. This translation of Global Business Guide Indonesia clarifies that it was the fault or negligence of a singular member of the Board of Directors, rather the fault or negligence of the entire Board.

D. General assessment across popular translations

A similarity found throughout the aforementioned three translations is the preference in translating ‘pemegang saham’ as ‘shareholders’ instead of ‘shareholder’. This choice of words likely arose of the translators’ practical consideration – that it would be absurd if a single shareholder was legally required to have such a large number of shares, even though the large number of shares would be some sort of investment for the shareholder and become equity for the company involved.18 To illustrate the point: Jakarta Post reported that the shares of highest valued company in Indonesia, Indocement Tunggal (“INTP”), would cost about Rp. 17,332 (equivalent to S$1,74096) per share out of Rp. 7.74 Trillion worth of sale.19 It showed how difficult it would be for a single shareholder to have 1/10 (one-tenth) of Rp. 7.74 Trillion as regulated in s 97 (6) of the Act.20 Furthermore, such a large purchase of shares must be paid-up in full without instalments under Article 22 of Indonesian Investment Coordinating Board (“BKPM”) Regulation Number 5 of 2013.21 Hence, although the term ‘pemegang saham’ is a singular noun contrary to its plural translation as ‘shareholders’, the translations above are nonetheless sensible. They reflect the practicalities of the Indonesian Companies Act as correctly understood by the translators.

However, none of the above translations sufficiently explain the nature of derivative actions in the Act. Notwithstanding their mention of minimum requirements to submit these actions, these translations do not clearly indicate that “derivative action” in Section 97(6) of the Act employs aspects of both statutory and common law derivative actions. This runs possible risks where legal practitioners, especially those accustomed to the Common Law legal system, may automatically assume that the derivative action in Indonesia refers to common law derivative action.22

E. Suggestions for improvement

All 3 translation techniques should therefore be used in translating Section 97 (6) of the Act (namely literal translation, modulation, and description). First, literal translation can be used to translate the phrase of “Atas nama Perseroan, pemegang saham yang mewakili paling sedikit 1/10 (satu persepuluh) bagian dari jumlah seluruh saham dengan hak suara…” into “On behalf of the Company, the shareholders representing at least 1/10 (one-tenth) from the total number of shares with voting rights…” similar to the translation by Global Business Guide Indonesia.23 This translation technique builds the fundamental understanding of the formulation of Section 97(6) since the literal meaning of the first phrase best captures the core of the legal concept of the legal requirements for legal subject to make claim or submission of derivative action.

On the other hand, the subsequent phrase would be more accurately translated via modulation: “…dapat mengajukan gugatan melalui pengadilan negeri terhadap anggota Direksi yang karena kesalahan atau kelalaiannya menimbulkan kerugian pada Perseroan”, can be translated into “…may submit a claim to a District Court against member of the Board of Directors which causes loss to the Company due to their fault or negligence”. Modulation here clarifies the identity of the subject whose fault or negligence causes the Company’s loss. This avoids ambiguity, and is preferable to a literal translation. With regards to applying Description as a translation technique, 2 possible applications are suggested. The first is to apply Description in the formulation of the section itself, where a description of the legal concept may be appended after the first phrase. (that is to say, “On behalf of the Company, …”) Descriptions attached here can elaborate on the similar requirements to be qualified for submitting a derivative law. For instance, the description may add “…, similar to common law derivative action that requires the minority shareholder to submit a claim on behalf of the company instead of their own personally”.

This additional description clarifies the kind of derivative action which a minority shareholder would need to submit under this section of the Act, although it may add to the section’s length. It is further recommended that such descriptions be supported by opinions from an expert in corporate law, and it would be sufficient if this source’s reference was indicated in the Explanation of the Act. The source need not be specified explicitly in the formulation itself, as noted by the term [learned textbook authors].24

Alternatively, Description can also be applied in the Explanation of each section of the Act. These Explanations supplement each section of the Indonesian Company Act, and are presently required to contain a legal norm, and be formulated in short and clear sentences as specified in Point 77 of The Annex of Regulations Act Number 12 of 201125. These rules are to maintain the clarity of legal norms in sections, but it is submitted that Descriptions can further elaborate on these legal concepts. An example for description translation technique applied in the explanation of an act is as follows:

“This section regulates derivative action that may be submitted by minority shareholders. The derivative action in this Act is similar to the common law derivative claim in the matter of submitting on behalf of the company, where the minority shareholder must have specific minimum requirement of shares and valid voting rights, and can only be submitted against breach of negligence. Although it is regulated in a statute, rather similar to statutory derivative action, derivative action in this section resembles the common law derivative action since it has same elements as common law derivative action referring to Dignam’s opinion (Dignam and Lowry, Company Law, 2012, p. 109)”.

III. CONCLUSION

Legal practitioners would be confused between the three translations mentioned above, especially if they have been accustomed to derivative actions at Common Law. Therefore, literal translation, modulation, and description translation techniques should be combined to create a proper legal translation of Section 97 (6) of the Act. This is necessary to provide both lay persons and legal practitioners a proper understanding and prevent confusion. 


*Novritsar Hasintongan Pakpahan. Graduated as Law undergraduate of Airlangga University and English education undergraduate of Wijaya Kusuma University of Surabaya. Currently studying as a first-year student in Master of Law program in Faculty of Law of National University of Singapore specialising in Corporate and Financial Services in 2016/2017. All errors remain Novritsar’s own.

[1] No. 40 of 2007.

[2] Frank Tumbuan, “Two-Tier Board and Corporate Governance” (Pointers for discussion delivered at the One-Day Seminar on Capital Market and Corporate Governance Issues in Bali, Indonesia, 7 September 2005), p. 7-8.

[3] Susan Sarcevic, New Approach To Legal Translation (The Hague: Kluwer Law International, 1997), p. 67.

[4] Google Search Results, https://www.google.co.id/#q=indonesian+company+act+40+2007, accessed on July 2nd, 2017.

[5] Alexa Search Results, http://www.alexa.com/siteinfo/irmadevita.com;  http://www.alexa.com/siteinfo/gbgindonesia.com; http://www.alexa.com/siteinfo/unodc.org, accessed on July 2nd, 2017.

[6] As previously argued by the author in Novritsar Hasintongan Pakpahan, English-Indonesian Translation Techniques Applied on Legal Terms in John Grisham’s ‘The Litigators’, The Novel (Bachelor of Education, Universitas Wijaya Kusuma, 2015) [unpublished], at p. 5

[7] Ibid, at p. 22.

[8] Ibid.

[9] Undang-Undang Nomor 40 Tahun 2007 Tentang Perseroan Terbatas, Lembaran Negara Republik Indonesia Tahun 2007 Nomor 106, Pasal 97(6).

[10] United Nations Office on Drugs and and Crime, Law of The Republic of Indonesia Number 40 Year 2007 Concerning Limited Liability Company.

[11] Fawcett explained that literal translation doesn’t make any change from the source-language to the target-language grammar, in Peter D. Fawcett, Translation and Language. Linguistic Theories (Great Britain, St. Jerome Publishing, 1997), at p. 36

[12] Alan Dignam and John Lowry, Company Law (Great Britain: Oxford University Press, 2012) at p. 202.

[13] Misahardi Wilamarta, Hak Pemegang Saham Minoritas dalam Rangka Good Corporate Governance (Jakarta, Fakultas Hukum Universitas Indonesia, 2002) at p. 306.

[14] Irma Devita, Law of The Republic of Indonesia Number 40 of 2007 Concerning Limited Liability Companies

[15] Lucia Molina and Amparo Hurtado Albir, Translaton Techniques Revisited: A Dynamic and Functionalist Approach (Barcelona: Meta XLVII , Universitat Autonoma de Barcelona, 2002), at p. 500

[16] Global Business Guide Indonesia, Law of The Republic of Indonesia Number 40 of 2007 Concerning Limited Liability Company.

[17] Supra note 11, at pp. 499-500.

[18] Shareholders must have at least 1/10 (one-tenth) from the total number of shares with voting rights, in Rudhi Prasetya, Teori & Praktik Perseroan Terbatas (Jakarta: Sinar Grafika, 2011), p. 26.

[19] Adam Rizky Nugroho, ‘Five Most Wanted Stocks for Foreign Investors’ in http://www.thejakartapost.com/news/2016/09/17/five-most-wanted-stocks-for-foreign-investors.html, accessed on October 18th, 2017.

[20] Supra note 9.

[21] Peraturan Kepala Badan Koordinasi Penanaman Modal Republik Indonesia Nomor 5 Tahun 2013 tentang Pedoman dan Tata Cara Perizinan dan Nonperizinan Penanaman Modal.

[22] Supra note 3.

[23] Supra note 12.

[24] Supra note 4 at p. 190.

[25] Lampiran Undang-Undang Pembentukan Peraturan Perundangan-Undangan Tahun 2011.


A PDF copy of the article, along with its bibliography in full, is available for download here.

The Editors would also like to thank Mr. Sean Rafferty for his assistance and contibution, which have been significant in the course of editing this work.

Singapore Law Review Annual Lecture 2017 - Prosecution in the Public Interest

by Tan Ming Ren and Liew Jin Xuan

The Singapore Law Review Annual Lecture 2017 was delivered by Attorney-General, Mr Lucien Wong SC (“AG Wong”). Notably, AG Wong recently took office as Singapore’s 9th Attorney-General on 14 January 2017, succeeding Mr V K Rajah SC. AG Wong’s lecture, which was entitled “Prosecution in the Public Interest”, covered issues such as what the public interest is, and how prosecutorial discretion interacts with it.

AG Lucien Wong giving his speech.

Interestingly, AG Wong highlighted that the public interest permeates all the decisions that are made by the Attorney-General’s Chambers (“AGC”), and determining what is in the public interest is something which AGC officers engage in on a daily basis. Nevertheless, AG Wong opined that it is impossible to lay down a definitive statement as to what the public interest is because this has to be determined on a case-by-case basis.

The bulk of AG Wong’s speech was focused on the 4 guidelines related to prosecuting in the public interest:

  1. Prosecutions are conducted in the name of the public;
  2. Offences are prosecuted for the good of the public;
  3. Proceedings are conducted according to values expected by the public; and
  4. Action is taken in the eye of the public.

Prosecutions are conducted in the name of the public

While it is widely known that every prosecution initiated by the AGC is named Public Prosecutor v [name of accused], AG Wong emphasised that this is not merely a naming convention. In other words, the fact that cases are brought by the Public Prosecutor means that decisions to prosecute are made independently.

As the Attorney-General, AG Wong wears 2 hats. Firstly, art 35(7) of the Constitution of the Republic of Singapore (“Constitution”) provides that AG Wong is to act as the Government’s chief legal advisor. Secondly, art 35(8) of the Constitution vests in AG Wong the power to institute, conduct or discontinue any proceedings for any offence. These two functions are separate and distinct. In particular, AG Wong stressed that prosecutorial decisions are made by himself and his Deputies.

The second point is that criminal prosecutions are initiated by the AGC not to further the private interests of the victim, but to further the larger public interest. While AGC does take into consideration the views of the victim, AG Wong emphasised that they are not determinative.

Offences are prosecuted for the good of the public

AG Wong mentioned that various factors are considered when it comes to determining what is for the good of the public, and it is impossible to give all-encompassing factors. However, there are largely 4 objectives they often aim to achieve via prosecution.

Maintain a safe and secure environment in Singapore

The AGC maintains a non-negotiable policy to prosecute crimes that affect the public safety in Singapore. Instances of such crimes include corruption, serious financial crime, drugs and violent crimes. AG Wong highlighted that Singapore today is deemed as one of the safest cities in the world, and is heartened to note that in 2016, Singapore reached 30-year lows in violent crimes, housebreaking, theft and robbery.

In particular, safeguarding social harmony is also part of maintaining the safety and security of Singapore. Situations around the world shows that damaging social relations can result in serious consequences.

Promote a culture where rights are respected

By promoting a culture where rights are respected, it provides for a conducive environment for business. Business may be competitive, even cutthroat, but they must adhere to the rules. There is a zero-tolerance policy against money laundering and corruption. Should corruption be tolerated in Singapore, our reputation as a safe and honest place to do business would be irreparably damaged.

Promote strong public institutions

The promotion of strong public institutions is essential for the peace, harmony and prosperity of Singapore. AG Wong went on to explain the seriousness of the crime of contempt of court. Though it may not fit with layperson’s view of a crime, it is in fact viewed as the one of the most serious offences a person can commit. There is a need for strong public confidence in judiciary to be maintained (both locally and abroad).

Serve larger objectives that may not be immediately apparent to most (e.g. promoting environmental sustainability)

AG Wong introduced the fourth objective with an example Singaporeans are all too familiar with - the haze. The haze not only has an impact on climate change, but also on human health. With recent changes in the law, Singapore is now in a position to prosecute companies within Singapore who contribute to pollution overseas. AG Wong also noted the rise in fake news and offences against some of the most vulnerable members of society, such as domestic workers and the elderly. On the topic of offences against elderly persons, AG Wong explained that as the elderly have worked hard their entire lives, they often have substantial savings, making them potential bribe targets for fraudsters. There is hence a need to provide protection of law by severely prosecuting offenders, achieving the ultimate objective of deterrence.

Proceedings are conducted according to values expected by the public

AG Wong explained that prosecution is also done according to values of the public. Prosecution does not aim to win at all costs, but rather, to obtain a just outcome. Neither is it a policy of the AGC to always automatically prefer the most serious charge. AG Wong emphasised that every defendant has the right to claim trial, and the AGC will not push for overly excessive and punitive sentences just because the defendant has decided to claim trial. However, it is important to note that the way the defendant pleads his case may affect the sentencing outcome.

Where a serious offence has been committed, but the evidence may not be as compelling, the AGC will still likewise pursue a conviction.

Action is taken in the eye of the public

AG Wong stressed that prosecutions were open to valid public scrutiny, and rightly so. Nonetheless, he maintained that scrutiny would not detract from the Prosecutorial drive toward justice, and hopes that the public may scrutinise fairly. Whilst there is no hesitation to respond to public interest for a tougher sentence, they will similarly not compromise on procedural fairness for the offender. He noted that this must be so, even if ultimately it undermines the Prosecution’s case. An “even-handed approach” is hence taken by the Prosecution when prosecuting offenders. He noted, “The public, and the public interest, expects no less from us”.

Sentencing in the Public Interest

On sentencing, AG Wong highlighted that the prosecutors also submit on sentencing with the public interest in mind, on top of prosecuting in the public interest. While this may seem odd at first blush, it is indeed not surprising that all parties (i.e. prosecutors and defence counsel) have a duty to help the Court arrive at a just sentence. In this regard, AG Wong clarified that it is not AGC’s practice to always ask for the highest sentence possible. This would depend on the individual case at hand and takes into account larger societal objectives.

A point which is noteworthy is AG Wong’s firm stance on 2 particular types of offences, namely, sexual offences against minors and offences against foreign domestic workers. As regards such offences, AG Wong made it clear that the prosecution would press for deterrent sentences in the interest of the public.

AG Wong also cited another recent example where the AGC disagreed with the original benchmarks laid down in the case of PP v Chow Chien Yow Joseph Brian [2016] 2 SLR 335, which involved national service defaulters. As the AGC was of the view that the existing benchmarks did not fully reflect the seriousness of the offence, the prosecutors made submissions to the court to increase the benchmark sentences in order to highlight the importance of the national service obligation. These submissions were subsequently accepted by the High Court in PP v Sakthikanesh s/o Chidambaram [2017] SGHC 178.

In contrast, pursuing even-handed justice means that a just sentence is one that is also fair to the accused. In that regard, the prosecutors will consider mitigating factors carefully and may even take active sentencing positions that favour the offender. For instance, in PP v Lim Choon Teck [2015] 5 SLR 1395, the prosecution appealed against the 8-week sentence imposed on a cyclist who had injured a 69-year-old woman on the ground that it was manifestly excessive. This was certainly unconventional as it was “the first time the Prosecution had appealed against a sentence on this ground” (at [1]). Eventually, the sentence was reduced to 2 weeks by the High Court.

In sum, these examples clearly reflect AGC’s commitment towards sentencing in the public interest, and it is indeed encouraging to know that AGC does not view accused persons as their “adversaries” although the criminal justice system is adversarial in nature.

Conclusion

In sum, AG Wong highlighted that prosecutorial discretion is a multifaceted and complicated task which requires a balance of various competing factors. Reaffirming the AGC’s commitment towards prosecuting in the public interest and for the good of Singapore, AG Wong noted that no single person in the AGC unilaterally “determines” the public interest in the AGC. Ultimately, a fully considered decision can only be reached through the process of open engagement.



For a more personal take on the lecture, here is an article by Justified: http://justified.nuslawclub.com/slr-annual-lecture-2017-prosecution-in-the-public-interest/

The SLR Annual Lecture 2017 has been featured in The Straits Times: http://www.straitstimes.com/singapore/prosecution-to-keep-apace-with-evolving-public-interest-attorney-general-lucien-wong

Prosecutorial Discretion: A Critical Evaluation

This article was written in 2008 by Ms. Ng Sook Zhen, who was then Deputy Editor of the SLR. It was featured in Vol. 4, Issue 5 of that year.

William O. Douglas, the longest-serving Justice of the Supreme Court of the United State once mused: “Absolute discretion is a ruthless master. It is more destructive of freedom than of any man’s other inventions.” Indeed, while internal guidelines ensure that prosecutorial discretion is less than absolute in Singapore, the Public Prosecutor (officially the Attorney-general on whose authority the Deputy Public Prosecutors act) is undeniably a very important actor in the local criminal justice system.

As Mr Winston Cheng, Deputy Public Prosecutor of the Attorney-General’s Chambers admitted during a talk held in NUS law school on March 18 this year: “We have the sole discretion in the institution, conduct and discontinuation of criminal procedure.”

This discretion operates on two-folds.

First, public prosecutors decide what to prosecute, looking at each crime committed on a case-by-case basis. The decision on whether to prosecute, as Mr Cheng noted, is “not for the sole purpose of obtaining a conviction”. “If a person is a first offender, is a student and is remorseful, you are not going to put him on a trial.”

The second form of discretion – and often the unwilling result of the sheer volume of cases to be reviewed – is the length of time taken to bring a case to trial. The usual lag time between when an offence is committed and when it is prosecuted in court is estimated to be about one to two years, depending on the complexity of the cases.

But there is no limitation period for criminal offences locally, and public prosecutors may choose to prosecute a case well beyond the time after it was committed. The case of Chan Kum Hong Randy v Public Prosecutor [2008] SGHC 20 (High Court) [Chan], for instance, showed that long lag times are not rare occurrences. In Chan, six to ten years elapsed between the detection of the offences committed and the actual prosecution.

“As a result of the delay in the prosecution, the appellant faces the prospect of having to suffer not once but twice the pain and hardship of incarceration as well as the rigours of reintegration into a society,” said Justice VK Rajah, who headed the appeal. (Chan at [50])

And the worry about discretion does not just stop there. Currently there is little publicly available information about this discretion process, and the lack of transparency is fast growing into a pressing concern. This issue was further highlighted in section 2 of the Workers’ Party Manifesto 2006, which read: “The real power to determine the offender’s sentence shifts from the Courts to the prosecution who will decide which to proceed on to produce the appropriate sentence. This encourages plea-bargaining which makes justice less transparent as the exercise of prosecutorial discretion cannot be reviewed or appealed against.”

Although Associate Professor Ho Peng Kee, Senior Minister of State for Law had announced during the 2007 Budget Debate that more disclosure measures would be introduced, no official response has yet to be implemented. Given unseen guidelines and unarticulated rationales, until more disclosure measures are in place, perhaps the sole comfort in prosecutorial discretion is our faith in the integrity of the people which operate the system.

As the former Attorney-General and now Chief Justice Mr. Chan Sek Keong emphasized in his speech during the 10th Singapore Law Review Lecture, delivered in 1996: “It is people who make a system fair and just, and not the reverse.”


A PDF version of the article is available here.

The Reserved Election Mechanism: A Step in the Right Direction for Promoting Multiracialism and Protecting Minority Rights?

This article was contributed by Ms. Susanna Yim, who is presently pursuing her third and final year in her Bacherlors' in Law at the Singapore Management University. The Editors would like to thank her for going the extra mile to make this submission.


The Reserved Election Mechanism (‘REM’) was introduced into Singapore’s Constitution recently as a response to Singapore’s current state of multiracialism. Specifically, Singapore has not evolved into a post-racial society yet and the REM was deemed necessary to strengthen multiracialism. This novel initiative has been met with varied response. This paper argues that, on balance, the REM is a robust example of the constitutional importance accorded to multiracialism and minority rights in Singapore. The mechanism holds true to constitutional principles and shows fixed commitment to guaranteeing minority rights. Still, the mechanism has room for improvement. Largely, the inescapable effects of implementing the mechanism and the perception of minorities that the scheme perpetuates among the population may end up, though guaranteeing minority rights, undermining multiracialism drastically. Additionally, the current community categorisation may water-down the REM’s protection of certain minorities’ rights. Nevertheless, considering the inherent delicacy of presidential office, due to its solitary and high-stakes nature, the REM remains sufficiently balanced.


I. INTRODUCTION

Multiracialism is the proverbial glue holding Singapore’s otherwise racially fragmented society together. Unsurprisingly, multiracialism has been accorded constitutional importance since Singapore attained independence in 1965. In 2016, the Reserved Election Mechanism (“REM”) was introduced in furtherance of this ideal.

The REM, established by Article 19B of the Constitution,1 operates such that within every five terms of the Elected Presidency (“EP”), individuals from each of the three constitutionally-defined communities2 are elected into the Presidential Office (the “Office”) at least once. This guarantees each community’s representation in the highest office every 30 years. The fact that the REM is constitutionally-entrenched speaks volumes of the paramountcy accorded to it in promoting multiracialism.

II. MULTIRACIALISM AND MINORITY RIGHTS

Multiracialism entails tolerating each ethnic community’s cultural values. Minorities generally refer to numerically inferior or subordinated groups in society. The attitude espoused in Singapore is one of promoting multiracialism and protecting minority rights.

A. Protection of minority rights

Generally, minority communities require formal arrangements by the government as reassurance that they will not be marginalized in their country.3 This is done by giving the minority communities autonomy and an active stake in the nation through power-sharing arrangements.4

Consequently, no community is excluded when it comes to decision-making and the use of executive power, as seen in Singapore’s Group Representation Constituencies (“GRC”).5

Moreover, minority communities face disadvantages due to their minority status, 6 especially since Singapore is not a post-racial society yet.7 Thus, efforts may have to be made to level the playing field for all communities through affirmative action,8 for example with the REM.

B. The delicate balance between minority protection and multiracialism

According additional rights to minorities may be perceived by non-beneficiary communities as unfairly privileging minorities, thereby increasing racial awareness instead of minimising it. Therefore, the government introduced the ethos of meritocracy to overcome this inescapable by-product of affirmative action; without meritocracy, “suspicion and prejudice [will] fester and grow” between communities.9 The adherence to democracy is also useful in this balancing exercise as it assures all communities that their views would be considered and represented.

III. HOW THE REM PRMOTES MULTIRACIALISM AND PROTECTS MINORITY RIGHTS

A. The REM recognizes distinct cultural identities, thus allowing it to include all races in its precise workings

First, the major racial communities of Singapore are accounted for in Article 19B(6).10 These neat delineations provide a clear basis for the rotation of the Office among the communities so as to promote multiracialism. This allows a systematic application of the REM, leaving little room for ambiguity; it is useful to make a contrast with the similar rotating-presidency scheme adopted in Nigeria.11 The Nigerian example has largely been criticized as having failed due to the ambiguous wording of its operative mechanism, which allowed certain communities to entrench their position of power instead of giving way to other communities as the Nigerian Peoples Democratic Party Constitution had intended.12

Further, the Presidential Elections Act13 introduces a Community Committee which will issue a community certificate to each election candidate14 to declare which community he or she belongs to, thus facilitating the counting of reserved elections. 15 Through this, the categorizing of each community becomes less semantic as a hand-picked group of individuals can better deal with the complexity of racial differentiation16 than mere words in a statute. The Committee will be instructed to take an inclusive approach in their assessment to strike a balance between ethnicity and identity, especially for individuals of mixed heritage.17 This clearly demonstrates the careful treatment of the sensitive issue of race and how the REM gives effect to multiracialism by considering all communities.

B. The REM demonstrates fixed commitment to representing minorities in the Office

Second, the REM safeguards minority rights by guaranteeing the election of a minority candidate every so often. This fixed commitment has a direct effect, leaving no room for ambiguity or discretion that may result in an alternative outcome that discriminates against minorities. As such, the minority groups should appreciate the REM for ‘championing’ their access to the Office. In contrast, consider the Serbian example. The requisite percentage of minority population in local communities for officialising the use of their minority language was left to local assemblies’ discretion. This resulted in biased local assemblies terminating the official use of minority languages in several communities. The minorities had proposed and would have preferred a set percentage instead of having to subject the protection of their language rights to the discretion of the local assemblies.18

C. The REM is consistent with constitutional ideals cherished in Singapore

1. Facilitates Representative Democracy

Third, representative democracy is facilitated as the Office remains multiracial over time.19 This is observed on two levels: firstly, since the President represents the nation itself in the global arena, the occasional minority President would show that Singapore consists not only of Chinese people, but also Indians, Malays and other racial minorities. Secondly, the REM allows wider participation in the EP since all communities would have one of their own taking the Office at least once every five terms.

2. Demonstrates substantive and procedural equality

Fourth, by reserving elections for communities under-represented in the EP, the REM has the effect of ensuring substantive equality12 since it levels the playing field to allow equality of opportunity.21 This can be seen as giving effect to the constitutional principle of equality.22 Additionally, the same qualification criteria in Article 1923 is applicable to both the reserved and the open elections, thus upholding procedural equality in the mathematical sense that only those who meet the threshold qualifications can stand for election.24

D. The REM is a self-correcting mechanism

Fifth, the REM’s hiatus-trigger25 is laudable as it gently nudges the population towards the goal of post-racial voting; once Singaporean society can vote in a manner that apparently does not indicate racial-bias,26 the REM would not be triggered.

Even if this hiatus-trigger is perceived to conflict with democracy and meritocracy, this would not remain the case for an indefinite duration. If the REM is triggered for three consecutive terms for each of the three constitutionally-defined communities to install in turn one of their own in the Office, the subsequent two elections will be open elections and, thus, as democratic and meritocratic as possible. The only criticism then would be that citizens must wait for these two elections within every five-term-cycle to have ‘truly’ democratic, meritocratic elections.

IV. CONTRASTING THE REM WITH EXISTING SAFEGUARDS

The EP is a particularly vexed platform to promote multiracialism and protect minority rights because of the solitary and high-stakes nature of the Office. In contrast, the GRC system27 involves multiple people, allowing a degree of simultaneous power-sharing. Additionally, the Presidential Council for Minority Rights scrutinizes parliamentary bills and the outcome of such scrutiny would invariably benefit all communities;28whereas the REM appears to benefit only one community each time it is triggered. Lastly, various constitutional articles29 can be relied upon by individuals from all communities at any point in time in litigation;30 whereas the REM is triggered only once in a while for a specific community when the conditions are right. Thus, the election of the President through the REM may periodically appear as a zero-sum game to be won by one community at the expense of all others.

Nonetheless, the REM is a step in the right direction for promoting multiracialism and protecting minority rights. A further step in the right direction would be to constitutionally provide for membership in the Council of Presidential Advisors to be multiracial as well, so that there is more opportunity for all the communities to engage in simultaneous power-sharing in relation to the high-stakes Office.

V. QUAERE: BUT DOES THE REM REALLY PROMOTE MULTIRACIALISM AND/OR PROTECT MINORITY RIGHTS?

A. Yes, the REM protects minority rights, but at the expense of meritocracy and democracy, ultimately detracting from multiracialism

First, while meritocracy appears to be upheld, it is also severely compromised – because the highest office of the land is no longer for the nation’s most deserving candidate but merely a good enough candidate from the community it is being reserved for.

Nevertheless, there have been calls to re-evaluate meritocracy considering the changing paradigm; meritocracy measures the individual’s performance but fails to account for additional inherent advantageous factors that the individual may have as against another individual of comparable ability.31 Arguably, an individual’s community can be considered as one of these factors, particularly in the context of elections.32 Further, the qualification criteria is applied indiscriminately of race,33 thus retaining some semblance of meritocracy. Moreover, this call to re-evaluate meritocracy is consonant with ensuring substantive equality.34

Second, the REM erodes democracy. Reserving elections for one community substantially reduces voters’ choice. Additionally, the Community Committee, which issues community certificates, is appointed by the Prime Minister on the nomination of the PCMR.35 This may result in a parallel controversy as in the uncontested 2005 Presidential Elections, where only one candidate was awarded the Certificate of Eligibility and thus became a ‘walk-in’ President. This consequently sparked furore as to the Committee’s decision and casting doubt as to whether the election was genuinely democratic.36

A potential area for abuse arises where candidates of mixed heritage are concerned: the Committee may choose to identify him as part of a particular community to bar or allow him to participate in a reserved election, or, in the case of an open election, affect the cycle for future elections.

Further, the basis on which the Community Committee is to make their decision is unclear. The Committee is to be guided by “the merits of the case”;37 but what are these merits? For instance, would the proficiency of the candidate in his mother tongue be relevant? More information would be helpful in promoting transparency and dialling down the disquiet surrounding the REM.38

B. No, the REM mechanically categorizes communities to the extent of over-homogenization

Third, the categorization of communities is inherently flawed, undermining both minority rights and multiracialism. While the process of declaring which community each candidate belongs to is now more palatable due to the Community Committee,39 the constitutional categorization itself is objectionable. Although these groupings have been utilized by the government for ease of administration,40 they over-homogenize and over-simplify the exquisitely diverse communities in Singapore,41 thus eroding multiracialism as defined above.

The government should re-formulate this categorization, particularly the “Indian and others” category. Given the sizeable increase of these subsumed communities42 and the apparent failure to appreciate their cultural differences, it seems unfair that these distinct communities have been collapsed into one convenient grouping – a blatant over-homogenization which has been unconvincingly rationalized as being a statistical decision. A practical effect of this is that, in extreme cases, instead of having a member of their community sitting in the Office at least once every five terms, either of the groups may have to wait for ten terms or more before a member of their community is elected.

C. No, the REM only promotes multiracialism and protects minority rights superficially

One must ask: how far can the REM go toward these two objectives? Undeniably, the REM will make the Office more superficially multiracial over time as a member of each of three communities takes its turn in the ‘hot seat’. However, such appointment per se does not necessarily translate into promotion of multiracialism and protection of minority rights, unless the EP wields his power and makes decisions and effects policies towards such ends. Should this happen, it is nonetheless hoped that the EP does not go ‘overboard’ and show bias towards a particular community and thereby become antithetical to representative democracy.43

VI. CONCLUSION

Promoting multiracialism and protecting minority rights requires a fine balance. The REM has struck a tenuous one by providing both guaranteed representation of all communities and some semblance of meritocracy. Its hiatus-trigger also ensures any unhappiness caused is short-lived. Nevertheless, its categorization of communities could do with some refinement.

The REM, being written into the Constitution, becomes part of the supreme law of the land. However, it is not a foregone conclusion that multiracialism will be promoted or minority rights protected – all the REM does is to ensure that each of the three communities takes its turn in the Office over time; it does not guide the way the President wields his power with respect to multiracialism and minority rights. To this end, more could be done in guiding the exercise of the EP’s powers.


[1] Constitution of the Republic of Singapore (1999 Reprint) Art 19B

[2] The three communities, the “Chinese”, “Malay” and “Indian and others”, are defined in Art 19B(6).

[3] Thomas Fleiner & Lidija R. Basta Fleiner, “The Multicultural State: The Challenge of the Future” in Constitutional Democracy in a Multicultural and Globalised World (K L Roy Trans) (Germany: Springer Berlin Heidelberg, 3rd Rev Ed, 2009), 511–650 at 649, section 8.4.4.3. The successful multicultural Swiss model of power-sharing is analysed in this chapter.

[4] Ibid, at 637–638, section 8.4.2.2.

[5] Speech during the Third Reading of the Parliamentary Elections (Amendment) Bill, Singapore Parliamentary Debates, Official Report (18 May 1988) vol 51 at col 23 (Mr Goh Chok Tong, First Deputy Prime Minister and Minister for Defence). Mr Goh stated that “the GRC proposal … effectively distributes power between leaders of the various communities. In fact, it favours the minorities.”

[6] Speech during the Second Reading of the Presidential Elections (Amendment) Bill, Singapore Parliamentary Debates, Official Report (6 February 2017) vol 94, column numbers not available (Mr Vikram Nair, Sembawang).

[7] Constitutional Commission, Report of the Constitutional Commission 2016 (17 August 2016) at p 87, para 5.15. (Chairman: Chief Justice Sundaresh Menon).

[8]  George Gerapetritis, “Introduction” in Mortimer Sellers & James Maxeiner, Affirmative Action Policies and Judicial Review Worldwide (Athens, Greece: Springer International Publishing, 2016), 1–9 at 2. The legitimacy of affirmative action lies in the very fact that “one cannot place at the same starting point people who have been treated differently in the past”.

[9] Chan Sek Keong, Multiculturalism in Singapore (2013) 25 SAcLJ at p 108, [45].

[10] Constitution of the Republic of Singapore (1999 Reprint) Art 19B(6).

[11] Agaptus Nwozor “Power Rotation, Ethnic Politics and the Challenges of Democratization in Contemporary Nigeria” African Study Monographs 2014; 35(1): 1–18, at 2. “The [Peoples Democratic Party] in 1999 designed the zoning formula to give all the six geopolitical zones of the country a chance to have a shot at the presidency. Each zone was expected to enjoy a four-year term in the presidency after which the race would be thrown open.”

[12] Ibid, at p 8, 10 and 13.

[13] Presidential Elections Act (Cap 240A).

[14] Ibid, ss 8E and 8F.

[15] Ibid, ss 5A, 8G and 8H.

[16] Speech during the Second Reading of the Presidential Elections (Amendment) Bill, Singapore Parliamentary Debates, Official Report (6 February 2017) vol 94, column numbers not available (Mr Vikram Nair, Sembawang).

[17] Ibid, column numbers not available (Mr Chan Chun Sing, Minister, Prime Minister's Office).

[18] Tibor Varady, “Minorities, Majorities, Law, and Ethnicity: Reflections of the Yugoslav Case” Human Rights Quarterly 1997; 19(1): 9–54, at p 22, under the heading “Decline of Minority Rights Praeter or Contra Legem”.

[19] In the same vein as then-Prime Minister Lee Kuan Yew; Zuraidah Ibrahim and Irene Ng, “Good to rotate EP among races”, The Straits Times (11 August 1999) at p 27.

[20] George Gerapetritis, “Introduction” in Mortimer Sellers & James Maxeiner, Affirmative Action Policies and Judicial Review Worldwide (Athens, Greece: Springer International Publishing, 2016), 1–9 at 4.

[21] George Gerapetritis, “The Moral Question: Interacting with Traditional Values” in Mortimer Sellers & James Maxeiner, Affirmative Action Policies and Judicial Review Worldwide (Athens, Greece: Springer International Publishing, 2016), 11–40 at 14.

[22] Constitution of the Republic of Singapore (1999 Reprint) Art 12.

[23] Constitution of the Republic of Singapore (1999 Reprint) Art 19.

[24] George Gerapetritis, “The Moral Question: Interacting with Traditional Values” in Mortimer Sellers & James Maxeiner, Affirmative Action Policies and Judicial Review Worldwide (Athens, Greece: Springer International Publishing, 2016), 11–40 at 13.

[25] A reserved election is only called where a particular community has not been represented in the Presidential Office at least once within the past five terms of the EP.

[26] The assumption is that the electorate has reached a post-racial state of voting when a minority candidate is elected without the need of any quota or affirmative action.

[27] Constitution of the Republic of Singapore (1999 Reprint) Art 39A.

[28] Ibid, Art 68–92. In particular, see Art 68 and Art 78.

[29] Ibid, Art 12, 15 and 152. See also Chan Sek Keong, Multiculturalism in Singapore (2013) 25 SAcLJ at p 98, [29].

[30] For instance, Art 15 was instrumental in the case of Vijaya Kumar s/o Rajendran v AG [2015] SGHC 244, which had to do with the constitutionality of a police permit that prohibited the applicants from playing “music, gongs, drums or music producing equipment such as portable radio and cassette recorder” during their Thaipusam procession, and the playing of certain drums were integral to the religion of the applicants.

[31] Kenneth Paul Tan, “How Singapore is fixing its meritocracy” The Washington Post (16 April 2016) < https://www.washingtonpost.com/news/in-theory/wp/2016/04/16/how-singapore-is-fixing-its-meritocracy/?postshare=7911460932318734&tid=ss_fb&utm_term=.ee978c40fe0f> (accessed 24 February 2017).

[32] Refer to the detailed explanation of written submissions in the Constitutional Commission, Report of the Constitutional Commission 2016 (17 August 2016) at pp 84–85, paras 5.10 and 5.11. (Chairman: Chief Justice Sundaresh Menon). It was submitted that “a portion of voters will feel a greater affinity to someone who is racially similar to themselves”.

[33] See also part III C (2) of this paper.

[34] See also part III C (2) of this paper.

[35] Presidential Elections Act (Cap 240A) s 8E(2).

[36] See generally Thio Li-ann, “(S)electing the President of Singapore – Diluting Democracy?” (2007) 5 Int’l J Const L 526.

[37] Presidential Elections Act (Cap 240A) s 8G(4)(b).

[38] When asked, Minister Chan Chun Sing only clarified that “this [method of assessing race] is not new; it has worked well in the GRC context.” Speech during the Second Reading of the Presidential Elections (Amendment) Bill, Singapore Parliamentary Debates, Official Report (6 February 2017) vol 94, column numbers not available (Mr Chan Chun Sing, Minister, Prime Minister's Office).

[39] This idea of engaging a Community Committee is similar to the Committee established for the purpose of the GRC system, found in Art 39A(2)(b).

[40] Chua Beng Huat, Taking Group Rights Seriously: Multiracialism in Singapore (Australia: Murdoch University Asia Research Centre, 2005), 1–25 at 4–5. These groupings are also like those found in Art 39A, regarding the GRCs, and section 27A of the Parliamentary Elections Act (Cap 218, 2011 Rev Ed).

[41] Ibid, at 6.

[42] The Indian and others communities have increased from 8.6% and 2.3% of the entire population in 2006 to 9.1% and 3.2% in 2016 respectively. Population Trends 2016 < http://www.singstat.gov.sg/docs/default-source/default-document-library/publications/publications_and_papers/population_and_population_structure/population2016.pdf> (accessed 1 March 2017).

[43] Shaw v Reno 509 U.S. 630 at 648 (1993). The US case had to do with whether a congressional redistricting plan in North Carolina, which had the effect of segregating races for purposes of voting, offended the equality of representation. It was mentioned that “when a district obviously is created solely to effectuate the perceived common interests of one racial group, elected officials are more likely to believe that their primary obligation is to represent only the members of that group, rather than their constituency as a whole. This is altogether antithetical to our system of representative democracy.”


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My Opinion: Too Many Lawyers?

The following is an article from the previous iteration of Juris Illuminae, published in September 2009 as Vol. 6, Issue 1. It was authored by Mr. Mubin Shah, the Associate Editor and Events Director of the 29th Editorial Board.

THE LEGAL PROFESSION ACT was amended in 2008,1 giving effect to three important changes: the introduction of the Qualifying Foreign Law Practice scheme, enhancements to the Joint Law Venture structure and the liberation of Singapore law with respect to international commercial arbitration.

The 2008 Amendments were enacted to “provide greater flexibility to respond to changing business needs”. But I like to think that the Ministry of Law had us NUS students in mind while deliberating these amendments. The amendments create additional jobs for local undergraduates, by attracting Foreign Law Practices and increasing Singapore’s attractiveness as a hub for international arbitration. After all, the introduction of a second law school in Singapore inevitably leads to an increase in the number of lawyers competing for the same number of jobs. The first batch of SMU graduates increases the number of local undergraduates joining the legal industry in 2011 by at least 70%. Despite the shortage of lawyers in the legal workforce, Singapore would still need to create more jobs to accommodate all her local undergraduates.

To summarize, the amendments in 2008 encourage job growth in the legal sector. These amendments were made in anticipation of the influx of local graduates in 2011.

In 2009, a year later, the Legal Profession Act was amended again,2 with the foreseeable effect of further enlarging the pool of lawyers in Singapore. The question that begs to be asked is: Are the 2008 and 2009 Amendments antagonistic to their own purposes? Ultimately, can the Amendments in 2008 provide enough jobs for the larger pool of legal practitioners we can expect in the future?

I think we should not be overly concerned.

While it is easier for experienced Singaporean lawyers practicing overseas to return home, realistically, the number of lawyers who qualify under this scheme is, for want of a better word, insignificant. The purpose of making it easier for these lawyers to receive their Practicing Certificates is to attract them back to Singapore. These lawyers are assets to the legal community in Singapore and will bring with them a wealth of knowledge, experience and potentially even a Foreign Law Practice.

The 2009 Amendments also allow overseas graduates with Lower Second Class degrees to practice immediately. I find this change slightly more controversial. Previously, there were 2 mechanisms in place to ensure that Singaporeans who studied abroad were competent to practice law back home. The first mechanism, which is still in place, limits the number of recognised overseas foreign law schools while the second mechanism, which has been scrapped, limited the number of overseas graduates taking the Bar examinations immediately upon their return. In the past, only Upper Second-Class degree holders could take the Bar examination. Now, anyone with a Second-Class degree can do so.

One of the benefits of studying law locally, in all honesty, used to be that everyone who graduated with a Second-Class degree could practice. This is arguably unfair to overseas graduates, but it is nevertheless a strong incentive to study in Singapore (or at least I thought so). In light of this amendment, more students would seriously consider the benefits of studying overseas, in certain colleges or universities, where the entry requirements (this is moot) are not as stringent as that of NUS. The pertinent question now is: will there be a sudden influx of students applying to overseas law schools?

At face value, the 2008 and 2009 Amendments seem to contradict each other. The establishment of Foreign Law Practices and an international arbitration hub in Singapore envisioned by the Government will not take place overnight, though we can look forward to a flourishing legal industry in the near future. But how near is near? Are we going to be caught off-guard by the sudden surge of lawyers in 2011, or will we be prepared in time?


[1] Legal Profession (Amendment) Act 2008 (No. 19 of 2008)

[2] Legal Profession (Amendment) Act 2009 (No. 20 of 2009)


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Commentary on the Singapore High Court case of Ezion Holdings and Shareholder Access to Company Financials

By Vedam Rakesh

I. BACKGROUND

This case concerns the right of a shareholder of a company to financial information if the company has been dilatory in holding meetings.

The Plaintiff, Ezion Holdings Ltd., had previously owned the Defendant, Teras Cargo Transport Pte Ltd., but had subsequently sold the majority of the shares and become a minority shareholder.1

The Plaintiff sought an order under s 203 of the Companies Act [the Act]2 for the Defendant’s financial statements and accounts for the financial year [FY] ending in 2015, though these had yet to be prepared and audited.

In 2016, the Plaintiff filed an application seeking an order under s 203 of the Act for the Defendant to produce its financial statements and accounts FY 2015, though these had not been prepared or audited.

The last audited accounts had been issued in the FY 2012 and an annual general meeting [AGM] had been held in July 2016, three months after the present application was filed, where the audited accounts and financial statements for FY 2013 were produced to the shareholders and queries were made.3

The issue that arose was how s 203 of the Act should be read and whether the Plaintiff could request for and receive the unaudited financial statements for FY 2015.

II. DECISION

The Court denied the application by the Plaintiff4 and held that the Act did not confer a broad right to financial information to a member or shareholder.5

The Court found that s 203 of the Act operates in tandem with s 201 of the Act, which deals with AGMs.6 Therefore, s 203 did not give a right to general financial information, but rather, the financial information that is to be provided to a member is financial information tied to a general meeting.7

The Plaintiff argued for a broader reading of s 203 putting forward several reasons in support.

Argument #1

The Plaintiff argued that on the proper interpretation of s 203, the accounts do not have to be audited and laid, before a right arises to the statements.8

This argument was rejected as it ignored the structure of s 203(1), which reads: “A copy of the financial statements...which is duly audited and which (or which but for s 201C) is to be laid before the company.”9

Argument #2

The Plaintiff argued that the title of the section, which reads “Members of company entitled to financial statements, etc”, supported a broad reading of s 203.10

However, the Court observed that the title of a section is not determinative of its contents and is only intended to summarise the contents of sections for ease of reference; such titles are thus not always exhaustive or precise.11 It noted that although titles and marginal notes can and have been used in interpretation, according to the Court of Appeal at [41] in Tee Soon Kay v AG,12 the marginal notes must be taken against the backdrop of the actual language used in the section.

In the present case, the title of the section was only a broad and incomplete summary of the contents of the section. The term “etc” in the title clearly indicated that this section governs many matters, and that the title was not intended to be exhaustive.

Argument #3

The Plaintiff cited Burdeny v K & D Gourmet Baked Foods and Investments Inc [Burdeny]13 as authority for the proposition that the Defendant could be ordered to produce the unaudited financial statements to the Plaintiff.

The court found that the wording of the section of the British Columbia Company Act cited was different from s 203 of the Act. Furthermore, the financial statement referred to in Burdeny were statements that had already been prepared and the focus of Burdeny had been on the oppression suffered by the applicant there. Burdeny was therefore distinguished and did not offer strong authority for the Plaintiff’s arguments.14

Argument #4

The Plaintiff then relied on Article 122(B) of the Articles of Association [AOA] of the Defendant, which required that a copy of every profit and loss account and balance sheet together with the auditor’s report, to be sent to persons entitled to receive notice of an AGM not less than 14 days before the meeting.

The Court held that the AOA of the Defendant could not assist the Plaintiff either, because it was restrained by the same obligations as s 203 of the Act.15

Argument #5

The Plaintiff also cited the speech made by Mr Ong Teng Koon at the second reading of the Companies (Amendment) Bill [the Bill] on 8 October 2014,16 where the Member of Parliament had stated that "The third objective of this Bill is to achieve the correct balance between flexibility and transparency…”. The Plaintiff advanced the argument that this comported with a shareholder’s right to access financial information of the company.

The Court held that the speech could not assist in the interpretation of the provision because the it was concerned with other areas of the Bill and not specifically with the member’s right to financial information.17

The court set out the conditions when a parliamentary speech could be useful in interpreting a provision:

"[where] a Member proposes an amendment which is either accepted or rejected… the Member’s speech could be useful in interpreting the provisions if the amendment were passed, and even if it were not, any accompanying remarks in rejection may cast light on what was eventually enacted."18

Argument #6

The Plaintiff cited Devlin v Slough Estates Ltd,19 an English decision, for the proposition that a shareholder has a right to accounts where the articles of association require the preparation and laying of the accounts in compliance of the Act.

The Court observed that in that case, at p502, it was held that the individual shareholder had no personal right to commence an action for any breach of that obligation as the duty was owed by the directors to the company and not to the individual shareholders.20

Argument #7

The Plaintiff also cited Over & Over Ltd v Bonvests Holdings Ltd21 and Lim Swee Khiang v Borden Co (Pte) Ltd22 as authorities to support the argument that individual shareholders had a free-standing right to obtain financial information. However, both cases were concerned with the oppression of minority shareholders. Over & Over Ltd v Bonvests Holdings Ltd concerned an action for minority oppression by a plaintiff which had its interests disregarded; similarly, the statement by Chan Sek Keong CJ (as he then was) in Lim Swee Khiang v Borden Co (Pte) Ltd related to the enjoinment of the Courts to examine majority shareholders’ conduct under s 216. As minority oppression under s 216 was not pleaded by the Plaintiff in the present case, the Court found that the aforementioned cases did not apply nor offer strong authority.

II. COMMENTARY

It is now clear that a shareholder of a company does not have a right to obtain financial information of a company. He is only entitled to audited financial records that are presented at AGMs.

The rights that shareholders possess include the right to vote, the right to dividends when it is declared, the right to appoint and remove directors and the right to alter the company’s constitution. The management of the company is left to the directors to handle and the shareholders generally do not get involved in these matters. Since the shareholders do not participate in the management of the company, they do not need an unfettered right to financial information.23

However, if there have not been any AGMs held, or the AGMs have been postponed, the shareholder is left completely in the dark about the financial situation of the company in which he has invested.

In such a situation, the shareholder is left with a few options.

  • First, he can wait for the AGM to be held and hope that the delay (however long) in viewing the audited accounts does not adversely affect him.

  • Second, he can - as the court noted in the present case - make an application under s 216 of the Act for Minority Oppression.24

s 216 of the Act gives the court wide discretionary powers under which, if the majority is found to have acted unfairly, the court can direct or prohibit any act or cancel or vary any transaction or resolution under s 216(2)(a),25 as well as regulate the conduct of the affairs of the company in the future under s 216(2)(b).26

Therefore, under s 216, the court could order that the minority shareholders be allowed to view the audited financial records.

However, s 216 of the Act is somewhat of a poisoned chalice. As cases involving requests for shareholder access to financials are prone to recurrence, the only realistic solution is often for one of the parties to exit the company. Shareholders seeking such access would may be daunted by the possibility of an order for them to sell their shares to another should the courts find that they are unable to co-operate. In extreme instances, the Court is also empowered to order the winding-up of the company under s 216(2)(e) of the Act,27 even if the parties had not asked for such a result.

One can thus understand why minority shareholders may be hesitant to make a claim of minority oppression under s 216 of the Act.

In addition, these actions for shareholder access will fail if there are genuine reasons for postponing the AGMs, and the directors have acted fairly, honestly and diligently. In such a scenario, the shareholder has no other route to view the financial records of the company.

So, what does the minority shareholder do then?

A. Should a minority shareholder have a right to financial information?

As observed by the court at [31] in Ezion, “our present statutory regime balances the rights and obligations of a number of different parties, not only those of the shareholders or members, but also the directors and creditors.”28

While an unqualified right to financial information of the company would benefit the shareholders immensely, such a right would probably impose additional burdens on the company and its directors.

B. What is the solution for the Plaintiff in the present case?

In the present case, the Defendant had failed to present the Plaintiff with any financial statements of the company between the years 2012 and 2016 (a duration of 4 years). The former had only called an AGM to present the FY 2013 statements to the shareholders after the Plaintiff initiated its action in court in 2016. To add insult to injury, the Directors of the Defendant were not able to answer queries about the FY 2013 financial statements at their AGM.

One of the points made by the Plaintiff in the present case was that its rights could not be enforced through the relevant agencies as “the failure to hold an AGM only leads to small fines, and nothing more”.29 For instance, if a company fails to hold an AGM, “the company and every officer of the company who is in default shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $5,000 and also to a default penalty” according to s 175(4)(a) of the Act.30

A fine of this amount is, unfortunately, hardly a deterrent to a company that is sufficiently motivated to keep its minority shareholders in the dark with regard to financial information and – as observed above – s 216 of the Act presents other difficulties that may dissuade shareholders from raising actions for Minority Oppression.

While it is agreed that an unqualified right to information should not be given to shareholders, under the present state of affairs the shareholder is left at the mercy of the company with regard to financial information.

It is humbly submitted that minority shareholders require another avenue to gain access to the financial information of the company.

One possible suggestion is that an amendment could be made to the Act, giving the shareholders a fettered right to check the financial records of the company if an AGM has not been called within the time limit stipulated in the Act, and a reasonable period of time has passed.


[1] Ezion Holdings Ltd v Teras Cargo Transport Pte Ltd [2016] SGHC 175; [2016] 5 SLR 226 [Ezion] at [2].

[2] Cap 50, 2006 Rev Ed.

[3] Supra note 1, at [3].

[4] Supra note 1 at [11].

[5] Ibid at [12].

[6] Ibid at [15].

[7] Ibid at [16].

[8] Ibid at [17].

[9] Ibid.

[10] Ibid at [17].

[11] Ibid at [18].

[12] [2007] 3 SLR(R) 133 at [41].

[13] [1999] BCJ No 953.

[14] Supra note 1 at [24].

[15] Ibid at [25].

[16] Parliamentary Debates Singapore: Official Report, vol 92 at col 14 (8 October 2014) (Ong Teng Koon, Member of Parliament, Sembawang).

[17] Supra note 1 at [27].

[18] Ibid at [28].

[19] [1983] BCLC 497.

[20] Supra note 1 at [26].

[21] [2010] 2 SLR 776.

[22] [2006] 4 SLR(R) 745.

[23] Ibid at [19].

[24] Supra note 2, s 216.

[25] Ibid, s 216(2)(a).

[26] Ibid, s 216(2)(b).

[27] Ibid, s216(2)(e).

[28] Supra note 1 at [31].

[29] Ibid at [9].

[30] Supra note 2, s 175(4)(a).


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