Multimodal Transport Bill

Order for Second Reading read.

3.52 pm

The Senior Minister of State for Transport (Mr Chee Hong Tat) (for the Minister for Transport): Mr Speaker, on behalf of the Minister for Transport, I beg to move, “That the Bill be now read a second time”.

The Multimodal Transport Bill 2020 will set up a new Act to give effect to the ASEAN Framework Agreement on Multimodal Transport. This provides for the standardisation of provisions relating to the international multimodal transport of goods to and from any ASEAN member country, under a multimodal transport contract.

A harmonised transport system will enhance regional connectivity in ASEAN and facilitate the free movement of goods, services and investment.

To support this goal, ASEAN member states have signed three framework agreements. The ASEAN Framework Agreement on the Facilitation of Goods in Transit was signed in 1998, followed by the ASEAN Framework Agreement on Multimodal Transport in 2005. The ASEAN Framework Agreement on the Facilitation of Inter-State Transport was signed in 2009.

ASEAN member states have been ratifying these agreements. In 2019, Singapore completed the ratification of the ASEAN Framework Agreement on the Facilitation of Goods in Transit and the ASEAN Framework Agreement on the Facilitation of Inter-State Transport.

We are now introducing the Multimodal Transport Bill, to facilitate Singapore ratifying the ASEAN Framework Agreement on Multimodal Transport later this year.

After all ASEAN member states have ratified the agreement, it will provide a single, unified framework for the multimodal transport of goods within ASEAN. This will include market access for Singapore logistics operators to operate in other ASEAN member states under a set of regionally aligned standards.

Sir, the Multimodal Transport Bill applies to the carriage of goods via more than one transport mode, whether through air, land or sea. These goods are carried by a multimodal transport operator registered with the Competent National Body established in the ASEAN member states, under a single multimodal transport contract where the origin or destination of the goods delivery is in an ASEAN member state.

The Bill covers four key areas, which are: (a) Registration with the Singapore Competent National Body; (b) Issuance of Multimodal Transport Document; (c) Liabilities of Multimodal Transport Operators; and (d) Duties and Liabilities of Consignors.

I will go through each of these areas.

First, the Bill will put in place the legislative framework for Singapore to recognise the Competent National Body, established by each ASEAN member state to maintain a registry of multimodal transport operators, or MTOs for short. For Singapore, the Land Transport Authority will be the Competent National Body.

MTOs have the option to join the registry. For these MTOs, LTA will issue them with registration certificates, after assessing that they have met requirements such as having insurance to cover any payment of claims, and maintaining a minimum level of assets.

Once issued, the registration certificate is valid for one year and can be renewed. The Competent National Body can also cancel the registration of MTOs if they have falsified material or contravened conditions of the certificate.

The second area of the Bill relates to the Multimodal Transport Document.

It will serve as a common documentational framework to be issued by MTOs registered with a Competent National Body. MTOs will be able to issue this document to consignors, which are the parties engaging the MTOs for the conveyance of the goods.

This document will be recognised by all ASEAN member states to certify that the MTO has taken charge of the goods and will deliver them in accordance with the multimodal transport contract.

Third, the Bill establishes a legal framework on the liabilities of the MTOs. Today, when disputes occur, liability between operators and consignors will be determined based on their contract terms, common law or other legislation.

With the Bill, there will be minimum standards for the liability regime.

For example, MTOs will be liable for the loss of, damage to, or delay in the delivery of goods when the goods are in their charge, but they will not be liable if these are due to inherent defects or caused by parties handing over the goods.

Fourth, the Bill also lays out the roles and responsibilities of the consignors. Consignors are required to accurately inform the operators of the details of the goods that they will be carrying, including if the goods to be transported are deemed dangerous in accordance to domestic laws or international conventions. If they fail to do so, they will be liable for any losses incurred related to such goods. Mr Speaker, Sir, I beg to move.

Question proposed.

3.59 pm

Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Speaker, Sir, transport is a crucial enabler of globalisation. Harmonised regional and global transport environments encourage global trade and tourism to flourish. The various elements of transport are akin to cogs in the wheel of a massive machinery. If one part gets stuck, the rest of the machinery will not be able to move smoothly. It may even come to a standstill.

We saw how this came into play during the pandemic. Border restrictions and closures worldwide caused supply chain disruptions in almost every country. Our excellent relationships and various bilateral agreements established with our foreign counterparts over the years enabled us to facilitate border movements for the transport of essential goods and services.

Today, countries looking to diversify their supply chains have set their sights on ASEAN, so we will certainly see a greater movement of goods and services within the region. Moreover, in the past decade, the ASEAN region has exhibited strong economic growth, which is driven by rapid urbanisation. A burgeoning middle-class population translates into increased spending power, providing viable markets of consumers in the region for our local companies to appeal to.

In this era, Singapore's active participation in the ASEAN Framework Agreement on Multimodal Transport (AFAMT) has become more relevant than ever.

The logistics sector in Singapore has grown with the rise of e-commerce. But Singapore is a small market and we should strike while the iron is hot, do more to help our local logistics companies to spread their wings and encourage them to look beyond the shores. I note that the implementation of a registry of multimodal transport operators recognised under AFAMT could be one of the ways to give our logistics sector a boost.

May I ask the Senior Minister of State, what is the process for logistics companies to join? I understand that some minimum conditions set by the AFAMT must be met, but overall, I hope the domestic qualifying criteria is not too onerous, or that the Government would help companies with it. The AFAMT framework has been described as useful for new logistics entrants to gain a foothold in new ASEAN markets. I believe that this would mean the threshold for eligibility is not out of reach for the less established logistics companies. On the other hand, we want our companies to be recognised for their abilities and reliability. I urge the Ministry to extend assistance to raise standards across the companies that opt to join the registry.

Mr Speaker, it is also important that we address how the movement of hazardous materials is to be addressed under this AFAMT framework. At the same time, we must also ensure that there is a robust system in place to prevent the movement of illicit goods, such as drugs, weapons, wildlife and so on.

Will there be outreach efforts to encourage companies to join the registry for example? Specifically, how would being on the registry or possessing a Multimodal Transport Document improve their access to potential clients in the ASEAN region? Will they enjoy some form of protection and insurance for their services and goods?

Among the many challenges associated with overseas operations, one of the major concerns is making sense of the foreign policies and laws. If their cargo or carriers go missing or get seized, would they receive assistance to retrieve it? With extreme weather causing more catastrophic events and natural disasters, do they get some form of insurance or support as part of the registry to curb their losses? This could take the form of strategic planning and risk management to help them navigate the safest routes based on the season and current trends. The current COVID-19 pandemic has emphasised the importance of transport network to ensure that essential items from food to medicine can be moved expeditiously, with minimum hinderance.

I believe that being part of this registry can only be a boon. Administrative work, red tape and long waiting times are costly aspects of business overheads. The Multimodal Transport Document is recognised by all ASEAN member states. It streamlines the process such that companies seeking to transport goods across ASEAN would not have to navigate different regulations. This would translate into lower overheads and better margins for companies. Reduced logistics means and presents a win-win situation for all.

Sir, I support the Bill. May it be a stepping stone for our logistics sector to soar to greater heights.

Mr Speaker: Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 4.25 pm.

Sitting accordingly suspended

at 4.05 pm until 4.25 pm.

Sitting resumed at 4.25 pm.

[Mr Speaker in the Chair]

Multimodal Transport Bill

Debate resumed.

Mr Speaker: Mr Louis Ng.

4.25 pm

Mr Louis Ng Kok Kwang (Nee Soon): Sir, this Bill gives effect to the ASEAN Framework Agreement on Multimodal Transport (AFAMT) signed in 2005. By streamlining the multimodal transport of goods among ASEAN member countries, AFAMT facilitates trade and greater regional economic integration.

A strong logistics hub is the backbone of trade. As Minister Iswaran said at the launch of the Logistics Industry Transformation Map (ITM) in 2016, "logistics is a critical enabler of our economy and our everyday lives".

Singapore has fared well in the past few years, placing seventh in the world and second in ASEAN in the World Bank's 2018 Logistics Performance Index.

More recently, Singapore's strength in logistics has also put it in good stead to become a COVID-19 vaccine distribution hub for the region. The AFAMT will strengthen our position as a logistics hub and help build a more agile and dynamic logistics network with the region.

Sir, I have two areas of clarification on the Bill.

My first area of clarification is on the registration regime set out for the Singapore Competent National Body. The process of appealing decisions made by the Competent National Body would benefit from clarity in two respects.

First, will a holder of a registration certificate be able to appeal the Competent National Body's decision to add to, vary or revoke any of the conditions of a registration certificate?

Second, rather than the Competent National Body state in writing the reasons for refusal to issue or renew a registration certificate only if requested by the applicant, can the Ministry consider making known the reasons for refusal upfront? Providing reasons for refusal to issue or renew a registration certificate upfront would avoid unnecessary back-and-forth and save everyone some time and effort.

My second area of clarification is on environmental sustainability. One goal of the AFAMT is to enhance the sustainability of multimodal transport operations. Can the Ministry share how Singapore's AFAMT National Work Plan aims to achieve this goal? The reason I am asking is that a region-wide strategic alignment on transport and logistics is a great opportunity to coordinate ASEAN and Singapore's plans for sustainability.

In 2019, the European Commission released a report, titled "Transport in the European Union: Current Trends and Issues". The report provides an array of recommendations on how the EU member states can align the development of their multimodal transport network in an environmentally sustainable way. One recommendation is to impose environmentally differentiated port charges to stimulate investment in green vessels.

Will the Ministry work with regional partners to study such initiatives? This can foster the longer term development of sustainable transport infrastructure in ASEAN and advance Singapore's status as a global logistics hub. Sir, notwithstanding my clarifications, I stand in support of this Bill.

Mr Speaker: Mr Don Wee.

4.29 pm

Mr Don Wee (Chua Chu Kang): Mr Speaker, Sir, I will begin by speaking in Mandarin.

(In Mandarin): [Please refer to Vernacular Speech.] I support this Bill which will enable registered multimodal transport service providers to move goods throughout ASEAN with a single Multimodal Transport Document. I am sure that logistics companies in Singapore will welcome the convenience this new framework provides. Upon joining the registry of operators recognised by the ASEAN Framework Agreement on Multimodal Transport (AFAMT), they will no longer have to submit different documents for each jurisdiction. Our SMEs which sell to other countries will also benefit from it. The reduced red tape will lower administrative costs and processing time, facilitate businesses within ASEAN and foster new partnership explorations.

(In English): Would the Minister elaborate on the criteria to be admitted into the registry? In addition, how does a customer know the amount of liability insurance that a multimodal transport provider has purchased? The amount of contracts that it can undertake should be predicated on the amount of liability insurance it has subscribed to.

I also have a concern regarding the language of the transport documentation. In the past, our companies had to coordinate the various modes of transportation, including ship and railway. Railway receipts and delivery notes issued by overseas service providers are not stated in English and thus cannot be submitted to financiers in Singapore as proof of delivery unless these documents are translated and signed off by notary public. The multimodal transport document should follow International Chamber of Commerce Banking rules and be accepted by banks in the event the consignor or consignee requires financing. This important piece of document proves that shipment has been made. ASEAN is an important gateway to other parts of Asia. Thus, I hope that we will have a common language for all related supporting transport documents.

I am also hopeful that this new framework will create more advanced jobs in the logistics sector. A multimodal transport operator's most important asset is its staff who must be well-versed in international transport procedures and regulations. In Singapore, the vocational training courses offered by the Singapore Logistics Association are excellent. But each MTO should take the responsibility to continuously train their staff by providing in-house or on-the-job training.

The new connectivity will boost supply chain efficiency and help to cement Singapore’s status as a trade, logistics and connectivity hub. Good connectivity in turn complement the various Free Trade Agreements which Singapore and ASEAN have inked with other regions and countries. I support the Bill as it will elevate our logistics industry and solidify Singapore’s position as the top logistics hub in Asia, if not the world.

Mr Speaker: Senior Minister of State Chee Hong Tat.

4.32 pm

Mr Chee Hong Tat: Mr Speaker, I would like to thank Mr Saktiandi Supaat, Mr Louis Ng and Mr Don Wee for their support for the Multimodal Transport Bill. Let me now address the points they raised.

First, the qualifying criteria for logistics companies to join the Registry are as follows.

It must be a company or a person whose business name is registered in Singapore. It must also have a principal place of business in Singapore.

It needs to have an insurance, bond, guarantee or other financial arrangements that can cover payment for claims arising from any loss, damage or delay in the delivery of the goods. This is a standard industry requirement.

Lastly, the company must maintain the prescribed minimum assets. At the start, we intend to set this to be the equivalent of 80,000 Special Drawing Rights which is equivalent to approximately S$153,000, based on current exchange rates.

These criteria are reasonable and would not be entry barriers for logistics companies. If the House approves this Bill, we will work with industry associations to reach out to logistics companies during the implementation.

Sir, I agree with Mr Louis Ng that LTA should provide its reasons upfront if LTA refuses to issue or renew a registration certificate. LTA will do so. If there are any appeals from the companies, these can be submitted to the Minister for consideration.

Mr Don Wee asked whether potential customers will know the amount of liability insurance that the company has. We will publish this information on the registry website when the company registers with LTA. This can help potential customers make informed decisions before engaging logistics companies for their multimodal transport services.

Sir, Mr Saktiandi Supaat asked about the movement of hazardous materials. The ASEAN Framework Agreement on Multimodal Transport does not introduce additional requirements on the type of goods or materials that can be transported. However, the Bill requires the consignor to accurately inform the multimodal transport operator, or MTO for short, of the nature of the goods. In particular, the consignor will need to spell out if any of its goods are of dangerous character, and could endanger life or property. If it fails to do so, the consignor will be liable to the MTO, if the MTO incurs any loss during the shipment that is due to the dangerous nature of the goods.

As for Mr Saktiandi’s question about protection and insurance for logistics companies, the Bill provides for a common and consistent liability regime for MTOs across ASEAN. To protect logistics companies, the Bill also sets out exclusion conditions to exempt MTOs from liability in the event of loss or damage to goods due to unforeseen conditions.

Mr Don Wee suggested that the contents of the Multimodal Transport Document be specified in English, to lower transaction costs for businesses. The ASEAN Framework Agreement on Multimodal Transport does not explicitly state the language requirements of the Multimodal Transport Document. However, as English is the official working language of ASEAN, we will work with fellow ASEAN member states towards formalising this arrangement for the implementation. There have been precedents in other ASEAN initiatives where documents are required to be in English or to be accompanied by a certified English translation.

Lastly, Mr Louis Ng asked about environmental sustainability for transport. This is an important topic. The ASEAN Framework Agreement on Multimodal Transport is focused on the legal, regulatory and procedural aspects of facilitating the multimodal transport of goods across ASEAN member states. So, it does not deal with environmental sustainability issues per se.

Having said that, ASEAN recognises the importance of environmental sustainability including in the area of transport, and there are other ASEAN initiatives and platforms that promote this goal. And Singapore, we are involved in these initiatives. These include the ASEAN Regional Strategy on Sustainable Land Transport, which was adopted by ASEAN Transport Ministers in 2018. Another example is the ASEAN Green Ship Strategy which was adopted in 2019.

Mr Speaker, the Multimodal Transport Bill will put in place the legislative framework for Singapore to ratify the ASEAN Framework Agreement on Multimodal Transport later this year.

Together with the ASEAN Framework Agreement on the Facilitation of Goods in Transit and the ASEAN Framework Agreement on the Facilitation of Inter-State Transport that Singapore have already ratified, this will bring us one step closer towards the goal of enhancing regional integration, which Members have spoken about. Sir, I beg to move.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. – [Mr Chee Hong Tat].

Bill considered in Committee; reported without amendment; read a Third time and passed.