Singapore Tourism Board (Amendment) Bill

Mdm Deputy Speaker: Minister for Trade and Industry.

6.25 pm

The Minister of State for Trade and Industry (Mr Alvin Tan) (for the Minister of Trade and Industry): Mdm Deputy Speaker, on behalf of the Minister for Trade and Industry, I beg to move, "That the Bill be now read a Second time."

The Singapore Tourism Board (Amendment) Bill principally amends the Singapore Tourism Board Act to provide the Singapore Tourism Board (STB) with statutory powers for the economic regulation of the cruise industry as well as to clarify and enhance STB's administrative capabilities and enforcement powers over the broader tourism industry.

Allow me to elaborate on the two key legislative changes contained in the Bill.

First, the transfer of economic regulatory role for the cruise industry from MPA to STB. The Maritime and Port Authority of Singapore (MPA) is empowered under the MPA Act to regulate the provision of marine and port services and facilities in Singapore, including the two cruise terminals – the Singapore Cruise Centre (SCC) and Marina Bay Cruise Centre Singapore (MBCCS).

For cruise services, MPA oversees maritime safety and security as well as the pricing of port services and facilities. MPA and STB also jointly regulate berth allocations and service standards of the terminal operators. This is sensible as these factors are vital to the implementation of our cruise tourism industry, which STB oversees.

Under clause 5 of the Bill, we are now formalising and clarifying STB's regulatory role over the cruise terminal operators in the Singapore Tourism Board Act. Let me explain why this is necessary.

Singapore's cruise tourism industry has grown tremendously since the opening of MBCCS. From 2012 to 2019, overall passenger throughout has grown at a compounded annual growth rate (CAGR) of 10.3% to reach 1.82 million.

Despite the COVID-19 pandemic, demand for cruise holidays has rebounded strongly worldwide. The Cruise Lines International Association projected that global cruise passenger volume will recover to pre-pandemic levels by the end of this year and increase by approximately 30%, compared to 2019, by 2026.

With a low market penetration rate of 0.2%, the cruise industry is especially optimistic about the growth potential in the Asia Pacific region. Cruise capacity in the region is projected to more than double from 3.4 million in 2022 to 7.3 million passengers by 2027.

As the volume of cruise tourism grows, Singapore's cruise terminals will become critical infrastructure for our tourism sector. To ensure that these terminals are operated in a manner that is aligned with our broader goals of developing Singapore's cruise and tourism activities, STB will need regulatory powers to ensure high service standards, optimise the use of the limited number of berths and prevent excessive pricing.

The newly added Part 3AA in the Bill provides clarity on the cruise terminal licensing regime.

New sections such as sections 32A and 32B further empower STB to conduct surveys and obtain information such as financial and operational data from the cruise terminal licensees. Such data will help STB monitor the industry's development and make comprehensive analyses and projections for effective economic regulation.

As cruise terminals are international gateways into Singapore with significant market power, sections 29R and 29S empower STB to have oversight and control over the ownership and acquisition of the cruise terminal licensees. The intent is not to control the day-to-day commercial decisions of the licensees but where there are material changes to the equity control of the licensee, STB's approval will be required to safeguard Singapore's national interests.

Section 29V also requires the cruise terminal licensees' central management and control to be ordinarily exercised within Singapore so that STB can take enforcement action swiftly if any contraventions ever arise.

Section 29ZB provides for a special administration order to be made, where the affairs, business and property of the cruise terminal licensee may be managed directly by STB. These powers are intended to ensure business continuity and avoid disruptions of cruise operations and passenger flows under extraordinary circumstances, such as the insolvency of a terminal operator.

In drafting these amendments, close references were made to similar provisions in the MPA Act, as well as the Civil Aviation Authority of Singapore (CAAS) Act, which exercises similar powers over Singapore’s airports. STB will exercise these powers with a light touch, with the primary goals of: one, growing the cruise industry to benefit our economy and, two, strengthening Singapore’s position as the region’s leading cruise hub. We have also consulted stakeholders in the cruise industry and have incorporated their feedback accordingly.

[Mr Speaker in the Chair]

Consequential amendments will be made to the MPA Act to avoid any overlaps in the regulation of cruise terminal operators when STB takes over the roles I have just described. All other marine and port services and facilities will continue to be regulated by MPA. STB and MPA will work closely to ensure the seamless implementation of these amendments.

The second set of changes clarifies and enhances STB’s administrative capabilities and enforcement powers over the broader tourism industry.

First, clauses 3 and 4 of the Bill introduce administrative amendments to update and incorporate flexibility into the Board’s voting processes, tenure and the number of members. This is in line with the Board provisions for other Statutory Boards.

Second, clause 6 of the Bill clarifies STB’s purview over tourism enterprises and expressly provides for powers to provide grants and act as guarantor for selected strategic tourism enterprises.

Third, clause 11 of the Bill accords legal recognition to the electronic version of tourist guide badges. This will allow tourist guides to access their badges more conveniently online. Both physical and electronic badges will continue to be recognised, until a transition to a full e-licensing regime takes place at an appropriate time.

Fourth, clause 21 of the Bill expressly provides for the power of the Board to collect and access tourism information reasonably required for the functions and duties of STB, including industry development and promotion. Examples of such information would be visitorship numbers and tourism receipts. To protect the information that has been collected, clause 21 also includes a “preservation of secrecy” provision to limit the onward disclosure of such information.

Fifth, this Bill expands STB’s administrative and enforcement powers, including according appropriate penalties, to regulate tourist guides and the cruise terminal licensees. This is necessary for STB to exercise its regulatory functions effectively.

Singapore’s tourism sector is poised for strong growth as it emerges from the effects of the COVID-19 pandemic. This Bill will enable STB to drive the development and regulation of our tourism sector more effectively and continue its efforts to make Singapore an attractive tourism destination for all. Mr Speaker, I beg to move.

Question proposed.

6.34 pm

Mr Louis Ng Kok Kwang (Nee Soon): Sir, this Bill allows STB to take over the economic regulation of cruise terminal operators from the MPA. This will enable STB to exercise regulatory oversight of financial matters in a manner that supports the growth and development of the cruise sector and in turn, Singapore’s tourism sector.

I have three clarifications.

My first point is on the new section 8HA. The section introduces a new power for STB to act as a third-party guarantor for the tourism enterprises. This is subject to the Minister’s approval and provided that the enterprise develops Singapore as a destination or enhances the travel and tourism sector’s contribution to the economy.

This new power comes with significant risks. STB may end up propping up mismanaged, decaying businesses. STB may also be accused of picking and choosing winners in the tourism industry, unfairly disadvantaging those not lucky enough to be chosen. This power should thus be used in extremely limited situations. The decision to use it must be guided by clear, objective frameworks of success.

How will the Minister decide whether to approve instances where STB seek to use this power? What factors will they consider? In what situations is STB envisioned to use this power?

My second point is about how public interest will be determined under the amended Act. A number of amendments proposed refer to the STB or Controller making decisions on the basis of “public interest”.

One example is the STB’s power in granting or renewing tourist guide licences to impose conditions that are in the public interest. The STB may also give licensees directions that are necessary or expedient in the public interest.

I ask this because “public interest” is not a term that is currently used in the Singapore Tourism Board Act. However, the term is repeatedly used in this Bill.

Given the scope of matters that can fall under “public interest” is very broad and that it is a new term in the context of the Act in relation to important decisions, can Minister share how “public interest” should be interpreted in the context of the Act?

My third point is on how STB will assist the cruise line industry in reaching its sustainability goals. Concerns have been raised about the carbon emissions, pollution and significant energy demands of cruises.

Earlier this year, the Friends of the Earth, an NGO, evaluated 18 cruise lines according to four environmental criteria. No cruise line got better than a C grade. Seven received a failing grade. The report card concluded that “clean cruising” was simply not possible.

Research suggests that a large cruise ship can have a carbon footprint of greater than 12,000 cars. That is twice the number of cars newly registered in Singapore every year.

The Singapore Green Plan 2030 aims for our nation to become a sustainable tourist destination. MPA has also said it aims to decarbonise the maritime industry. What steps will STB take to help decarbonise the cruise line industry? What targets will it set, and on what specific areas does it aim to drive reduced emissions? For instance, are there goals for cruises to transition first to using liquefied natural gas and subsequently to other low or zero-carbon marine fuels?

Notwithstanding these clarifications, I stand in support of the Bill.

Mr Speaker: Minister of State Alvin Tan.

6.38 pm

Mr Alvin Tan: Mr Speaker, I thank the Member for his support of the Bill and the opportunity to make some clarifications.

Mr Louis Ng asked about the introduction of a new provision for STB to act as a guarantor for tourism enterprises and the situations in which STB might do so. On rare occasions, STB may opt to exercise the power to act as a guarantor if there are strong and clear benefits to the economy.

Multiple layers of safeguards will be in place before STB takes on this guarantor role. For example, a comprehensive risk assessment will be conducted to measure factors such as: (a) the risk to the Government; (b) the track record of the tourism enterprise, (c) potential cost and time savings; and (d) economic benefits. STB will also need to seek the approvals of its Board of Directors as well as the Minister for Trade and Industry. Additional safeguards may also be taken to reduce the overall risk to STB, such as requesting indemnity from the tourism enterprise.

Mr Louis Ng also asked how public interest will be determined in this Bill. The term “public interest” appears in legislation of other regulatory regimes, such as in the Travel Agents Act 1975.

As I mentioned in my speech, the cruise terminals are international gateways into Singapore. As a port of entry, there are safety and security considerations on whether the cruise terminal licensee is fit and proper to operate such a critical checkpoint. Where there are risks to Singapore’s public interest, for example, being complicit in allowing a breach of border security, the Controller will be able to take into consideration these factors to assess the suitability of the licensee.

Other factors which may be taken into account include, but are not limited to, public health considerations. For example, in a public health emergency, cruise terminal and tourist guide licensees may be directed to abide by new protocols in relation to persons at cruise terminals or in their tour groups, so as to protect the general well-being of the public.

Just like other regulatory regimes, STB and the Controller will ensure there is clear public interest involved before relying on this ground.

With regards to the sustainability efforts of the cruise sector, which Mr Louis Ng asked about, the global cruise industry’s commitment to environmental sustainability is evident. Despite comprising less than 1% of the global maritime industry, the global cruise industry is at the forefront of developing innovative technologies and has invested more than US$26 billion in new ships with energy efficient technologies and cleaner fuels.

Liquefied natural gas (LNG) is one of the cleanest-burning non-electric marine fuels available today. There is an increasing trend of cruise lines building LNG-powered ships. This is a significant step as the use of LNG results in almost no sulphur emissions, reduces nitrogen oxide emissions by 85% and reduces greenhouse gas emissions by 20%. The industry is also actively exploring the use of alternative sustainable fuels and implementing them at scale in future.

In April this year, the Cruise Lines International Association (CLIA) announced clear commitments to implement environmentally sustainable practices at sea and at berths. CLIA’s global fleet of cruise lines aim to achieve net-zero carbon cruising by 2050 and reduce the rate of carbon emissions by 40% by 2030.

In line with our Singapore Green Plan 2030, Singapore is well-positioned to facilitate the cruise industry’s shift towards a more sustainable future. As a leading bunkering hub with expertise in ancillary services, such as the retrofitting of LNG ships, we are an ideal homeport for LNG-powered ships.

STB’s grant schemes also encourage the deployment of cruise ships with sustainable practices to Singapore. In 2022, Singapore will welcome its first deployment of an LNG-powered cruise ship, Silversea’s Silver Nova. This will pave the way for the deployment of more sustainably powered cruise ships to Singapore.

I wish to thank Mr Louis Ng for his questions and keen support for this Bill, which will be critical for our tourism industry.

Mr Speaker, Sir, the Government is committed to continuing its efforts to make Singapore an attractive and sustainable tourism destination and also fostering an environment for tourism enterprises to thrive. We look forward to the continued support of this House in this endeavour.

Mr Speaker: Any clarifications? Alright.

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 Alvin Tan].

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