SPEECH BY PROFESSOR S JAYAKUMAR,

SPEECH BY PROFESSOR S JAYAKUMAR, MINISTER FOR LAW AND MINISTER FOR FOREIGN AFFAIRS, IN PARLIAMENT ON 5 JUNE 1997

BILATERAL RELATIONS: GENERAL COMMENTS

Mr Speaker, Sir, this Debate is different from previous Debates on the President's Address. MPs have spoken not only on domestic issues but also on the recent difficulties in Singapore-Malaysia bilateral relations. They have asked for information on specific issues such as the Points of Agreement on railway land. I will explain the details of the POA later. But let me first respond to Members' comments on bilateral relations.

It is a fact that Singapore-Malaysia relations are going through a rough patch and are at a low point.

Rough Weather and Squalls

Dr Wang Kai Yuen reminded the House that the President, in his address, said "From time to time we must expect rough weather, even in tranquil seasons and despite the most careful navigation". Singapore-Malaysia relations have experienced rough weather and turbulence now for nearly three months. There has been one wave after another in this rough weather. Let me recount them.

The First Wave

The first wave came after the Senior Minister's remarks on Johor were made public. Although SM made his comments in his individual capacity and in a private suit, the matter became a Government-to-Government issue. KL sent an Aide-Memoire to the Government of Singapore. Vituperative and uncouth insults were hurled at SM. Vehement attacks were made against the Singapore Government and the Singapore people. Unrelated issues, like KTM and KD (Malaya) were brought up. This wave subsided after SM apologised and promised to delete the offending remarks from his affidavit.

The Second Wave

The second wave arose after the Malaysian media reported that the Malaysian Cabinet had decided to freeze new ties with Singapore. Within 24 hours, KL clarified that there was no freeze. But, since then some bilateral activities have been cancelled or postponed by Malaysia, causing people to wonder if there was indeed a freeze. For example, seven trainers from Johor who were training in our ITE were abruptly recalled and their training suspended. An official study visit to Singapore scheduled for mid-April 1997, to be led by the Mayor of Kuala Lumpur, was postponed indefinitely. Certain Malaysian Ministers also said that sports and cultural linkages would be suspended. One Minister even cancelled attendance at the opening of the "Destination Malaysia Tourism Fair" held in Singapore.

The Third Wave

The third wave came after the Straits Times carried a factual report on crime in Johor. The flurry of attacks started all over again. Threats were made to sever ties with Singapore and to cut off the water supply. One Malaysian Minister even warned our media to "stop it or suffer the consequences" and told Malaysian newspapers to mount a tit-for-tat media war against Singapore.

The Fourth Wave

The fourth wave started when one Malaysian Minister alleged that a drop in the number of Singaporean visitors to Malaysia was due to a Singapore Government directive. Another Minister jumped on this allegation the next day. All these were based on so-called "sources". Based on unsubstantiated sources and unfounded speculation, strong language was used - that Singapore was "confrontational" and "spoiling for a fight".

The Fifth Wave

A fifth wave appeared to be in the making last week when, with no prior announcement, some Singaporeans were prevented from returning to Singapore for several hours because of new Immigration checks. This is the surest way of discouraging Singaporeans from visiting Malaysia, far more effective than any Singapore Government directive could possibly be.

Other Aspects of Turbulent Weather

In between these big waves, there were other twists and turns, gales and whirlpools, such as offensive cartoons about Singaporeans going on sex holidays in Thailand and Indonesia. Singaporeans were also called uncivilised for urinating in lifts.

Malaysian Leaders Position: Takes Time to Return to Normal Relations

Throughout this period, Malaysian leaders at all levels have variously remarked that it would take time for bilateral relations to return to normal. DPM Anwar Ibrahim said on 6 April that "I think it has to be given some time. I don't think we should rush into the situation and ignore the sentiments of the Malaysian public". This was despite statements by Singapore leaders that we were prepared to move on with relations. As early as 15 March, PM Goh had stated clearly that both countries should try to move forward and concentrate on the positive aspects of bilateral relations.

Singapore will do its part to improve ties, but it will leave it to Malaysian leaders to set the pace. We will proceed at a rate they are comfortable with. This has been our consistent position.

How Have the Singapore Government and People Reacted?

During this squall, the Government and people have been calm, measured and restrained. We have not demonstrated in the streets. We have not hurled obscenities at Malaysian leaders. We have not issued threats, or pilloried Malaysians.

But as our MPs have said, it is important that our restrained reactions should not be misread or misunderstood - that we are weak, that we can be intimidated or cowed, that only one side has emotions and sensitivities.

The Two Countries Have Evolved in Different Ways

Mr Speaker, in the thirty two years after Separation, Singapore and Malaysia have become two different societies. We have evolved different political styles and approaches. It is important to recognize these differences so that we do not misunderstand or misread each other. Such recognition will avert problems and difficulties.

True, there are many similarities between our two countries. But there are fundamental differences in the way we have moulded our two countries and societies. These differences will always be there. They will spill over into bilateral relations from time to time. The question is: Despite this complicating factor, can we work together for common benefit? The answer surely must be - Yes.

Meetings of the Two Foreign Ministers

Singapore-Malaysia relations are too important to be allowed to drift. During this troubled phase, I have been in touch with my Malaysian counterpart. We have met twice, once in New Delhi when we were there for the Non-Aligned Ministerial Meeting, and last Saturday when FM Badawi requested to meet me, when I was in Kuala Lumpur for an ASEAN Foreign Ministers meeting. In New Delhi, we agreed to keep the lines of communications open. We also agreed on the importance of not misreading each other's intentions.

In KL, we discussed the allegations that Singapore had issued a directive to discourage Singaporeans from visiting Malaysia. I told him that such allegations were baseless. We also discussed the recent actions by Malaysian Immigration officers against Singaporeans. Mr Speaker, FM Badawi and I agreed that both Singapore and Malaysia could benefit from bilateral cooperation and we agreed to keep in touch. Since then, I should add, Mr Speaker, Sir, the Malaysian Foreign Ministry has given us some information and clarification on what has happened and we in turn have sought further clarification and details.

How Do We Take it From Here and Get Back to Even Keel?

Mr Speaker Sir, Singapore is committed to establishing a long-term relationship with Malaysia based on mutual respect, trust, reciprocity and mutual benefit. This is the way forward. As immediate neighbours, we are bound to have difficulties and differences. PM Mahathir himself recognized this. He said in Tokyo that "naturally between neighbours there will be differences off and on, but over time, this feeling can be overcome".

Mr Speaker, I am sure Members will agree that good relations with Malaysia are important to both Singapore and Malaysia. There is a lot at stake between both countries. Cooperation will benefit both Singapore and Malaysia. But it must be cooperation as equals and for mutual benefit. It cannot be on the basis of what Guang Ming Daily, a Chinese newspaper in Malaysia said, "Being a tiny island, Singapore should know the importance of maintaining cordial relations with its neighbours. Failure to recognise this fact is as good as dropping a rock on its feet". What the Chinese newspaper implied is, we should behave like a small brother. That cannot be the basis for a durable relationship between sovereign nations.

POINTS OF AGREEMENT

Let me now turn to the requests made by several Members for details on the POA.

Introduction

Some MPs have asked about the reports in both the local press and the Malaysian papers over the Malayan Railway lands in Singapore. They asked if it is true that we were creating the difficulties. They also noted that the Singapore Government had replied to the New Straits Times and we had also replied to a letter from KTMB published in the Straits Times. They wanted to know:

The background to these reports; and

The details of the Points of Agreement, or POA.

What is the Points of Agreement? It is a Government-to-Government agreement between Malaysia and Singapore concerning railway lands in Singapore. It was signed on 27 November 1990 by then PM Lee Kuan Yew on behalf of Singapore and then Malaysian Minister of Finance Tun Daim Zainuddin on behalf of Malaysia. It was signed on the same day that PM Lee handed over the Premiership to Mr Goh Chok Tong.

Background to the POA

Before I take the Members through the provisions of the POA, Members may wish to know the context in which the POA was concluded.

The Malayan Railway Administration (MRA), now Keretapi Tanah Melayu Bhd (KTMB), operates a railway on about 200 ha of land in Singapore. Of this, about 140 ha (or 70%) of land are held by the Federal Lands Commissioner on 999 year leases. These leases contain covenants which restrict the use of the land for railway purposes only and which also prevent the lessee from transferring the land other than for the purposes of the MRA. If these convenants are breached, the Singapore Government is entitled to resume the land in accordance with the terms of the leases.

In 1984, Malaysia asked Singapore if we had any special plans for the Malayan Railway land in Tanjong Pagar as Malaysia was thinking of stopping the railway at Woodlands and either selling or developing the property in Tanjong Pagar.

We responded that we preferred the MRA to continue to use the land at Tanjong Pagar for railway purposes. However, if the MRA did not want the land because it wanted to terminate its services at Woodlands, Singapore was prepared to take the land back in accordance with the leases of the various parcels.

This was where the matter stood till the late 80's.

Mr Lee Kuan Yew relinquishing the Premiership to Mr Goh Chok Tong

The General Elections in 1984 and 1988 were a watershed in Singapore politics. After the 1988 elections, Mr Lee Kuan Yew handed over the reins to the second generation of leaders. As PM Goh explained to this House on 13 June 1990, Mr Lee's main preoccupation at the time was to settle all outstanding bilateral issues so that the second generation leaders would not be saddled with the baggage of the past and fettered with the old mode of thinking.

One significant development in this regard was the 28 June 1988 Memorandum of Understanding (MOU) signed between then PM Lee Kuan Yew and PM Mahathir Mohamad on water, natural gas and the Changi ferry service. This MOU then paved the way for the 1990 Water Agreement on Linggiu Dam signed on 24 November 1990 by PUB and the Johor State Government in the presence of PM Lee Kuan Yew and PM Mahathir of Malaysia.

Our plan to move the CIQ to Woodlands

Amidst these developments, Singapore was also concerned over the trafficking of drugs from across the Causeway. Passengers arriving by rail are not cleared at the checkpoint in Woodlands, the first point of entry into Singapore, but only when they reach Tanjong Pagar. We had discovered cases of drugs being thrown out of trains before they arrived at Tanjong Pagar. Illegal immigrants also frequently jumped off trains before they reached Tanjong Pagar. Although the Police maintained vigilance, it was impossible to station officers all along the line. We could not allow this situation to persist. The Government therefore decided in September 1989 to shift our own Customs, Immigration and Quarantine (CIQ) facilities from Tanjong Pagar to the Woodlands Checkpoint.

Our decision to shift our CIQ was independent of any decision by the Malaysians to move their railway station to Woodlands. But in our assessment, it made sense for the railway to terminate at Woodlands. As I mentioned earlier, the Malaysians had also indicated in 1984 that they were thinking of stopping the railway at Woodlands and either selling or developing the property in Tanjong Pagar. But we knew that they were concerned that this would cause all MRA lands south of Woodlands to revert to the Singapore government as they would no longer be used for railway purposes.

Therefore, one possible approach was for Singapore to allow the Malaysians to redevelop some parcels of MRA lands that could be redeveloped independently, especially the site at Keppel/Tanjong Pagar, and for Singapore to share in the gain from this redevelopment. Those lands which could not be redeveloped would revert to Singapore. This would be a win-win arrangement.

Roots of the POA

PM Lee Kuan Yew then put a proposition to Tun Daim Zainuddin. He informed Tun Daim that most of the MRA lands in Singapore (with the exception of 3 plots in Woodlands, Kranji and Keppel) were narrow strips and not capable of independent development. If the MRA decided to terminate its line at the new Woodlands Checkpoint, then notwithstanding the restrictive covenant, the plots at Keppel, Kranji and Woodlands could be realienated to a company which would be owned 50:50 by nominees of Singapore and Malaysia. There would be no compensation for the other MRA lands resumed. PM Lee explained to Tun Daim that the land exchange should be limited to only these three parcels of land. The other plots, including the tracks, could not be included as it would otherwise lead to endless problems and arguments between Malaysia and Singapore in the future on whether those portions were capable of being developed.

Malaysia wanted the railway station to terminate at Bukit Timah, instead of Woodlands. Mr Lee agreed to this. But he proposed that the Bukit Timah station be economically built because in the longer term, Woodlands would be a better site. Malaysia also wanted a larger share in the joint venture company than 50%. PM Lee agreed to 60:40 in Malaysia's favour.

After further negotiations, the Points of Agreement was signed by PM Lee Kuan Yew and Tun Daim on the 27th of November 1990.

Terms of the Agreement

Mr Speaker, Sir, I have given to the Clerk of Parliament a copy of the full text of the POA with all the plans and annexes and I would request that it be placed on record and that Members be allowed to inspect it in the Parliament Library. I have given extracts of the Agreement to the Clerk of Parliament. With your permission I would like to request him to distribute this to the Members.

Point (1) of the Agreement states that the station at Keppel will be vacated and moved from Keppel, in the first instance to Lot 76-2, which is next to the Upper Bukit Timah Fire Station along Upper Bukit Timah Road near the junction with Jurong Road. The Government of Singapore will help in the alienation of such lands as may be reasonably necessary for the development of the station, provided that it is not necessary to acquire land which in the opinion of MRA and the Government of Singapore has major permanent structures on it. When MRA wants to acquire despite Government of Singapore's view that there are major permanent structures, then the acquisition will be at market price.

Point (2) stipulates that the land at Keppel will be vested in a limited company (M-S Pte Ltd) to be developed as residential and commercial land in accordance with our zoning plans.

Point (3) specifies that when the MRT reaches Woodlands New Town, the MRA may within five years, move its station from Lot 76-2 to a site in Woodlands adjacent or close to the MRT station. Then the two pieces of land, one in Kranji and in Woodlands, will be vested in the limited company M-S Pte Ltd and developed in accordance with plans given.

Point (4) goes on to specify that Singapore's Land Office shall issue freehold land titles to M-S Pte Ltd in respect of the lands at Keppel, Kranji and Woodlands.

Point (5) defines that 60% of shares of the limited company, M-S Pte Ltd, will be owned by a company to be designated by the Government of Malaysia; and 40% of shares by a company to be designated by the Government of Singapore. Payment for the development costs of these properties will similarly be shared in the ratio 60:40.

Point (6) goes on to say that there will be no compensation for the MRA land. Instead the three big pieces will be realienated to M-S Pte Ltd at no cost. Whoever takes the land should clear the tracks and also pay for the costs of resettlement of squatters. Therefore, the cost of clearing tracks and squatters for the three pieces of land will be on M-S Pte Ltd. For the balance of the MRA lands, the cost of clearance of tracks and squatters will be on the Singapore Government.

Point (7) states that in exchange for the MRA land at Keppel, a plot of land of equivalent value in Marina South will be offered to M-S Pte Ltd so that a prestigious building can be developed on this Marina site. M-S Pte Ltd intends to develop and retain a prestigious building as a long term investment. If the land offered to M-S Pte Ltd is, in the opinion of M-S Pte Ltd not suitable, then alternative sites in Marina South of equivalent value shall be offered to M-S Pte Ltd.

The Appendix to the POA states that the station to be built at Upper Bukit Timah Road at Lot 76-2 should be economically built until, in MRA's judgement, Upper Bukit Timah Road is the best long term location for the station. In Singapore's judgement the better long term location of the station for most economic benefits is either in Woodlands or in Johor Bahru. Hence, the proposed MRA station in Upper Bukit Timah Road should be economically built. The Appendix also states that MRA may conclude that it is better to move the station in the first instance to Woodlands. When the MRT extends from Woodlands to Johor Bahru, the MRA station can obtain economic benefits by moving to Johor Bahru.

The effect of the Agreement is that when the Tanjong Pagar station is relocated to Upper Bukit Timah, all railway lands south of Bukit Timah other than the Tanjong Pagar site will revert to Singapore. When the station is shifted to Woodlands, all the railway lands south of Woodlands other than the Tanjong Pagar, Woodlands and Kranji sites will revert to Singapore.

The land exchange contained within the POA, particularly the Kranji and Woodlands plots, was an incentive to encourage the Malaysians to move to Woodlands. At the time, the New Straits Times hailed the signing of the POA as "the best thing that could happen to further cement economic ties between the two countries".

Problems in implementing the POA

For four years after the signing of the POA, the Singapore Government worked with Malaysia to implement the POA. However, after signing the Government-to-Government Agreement, the Malaysians made requests which departed from the POA.

For example, the Malaysians wanted to retain developable lands outside the railway corridor which they considered capable of development, other than Keppel, Kranji and Woodlands. They later also asked to include a commercial/shopping complex in the Bukit Timah station and for four more parcels of land in exchange for moving straight to Woodlands. Singapore was also approached on whether we would agree to develop the Bukit Timah Site on a 60/40 basis if MRA relocated its station straight to Woodlands.

Singapore's position was that the terms of the POA were clear and had to be adhered to. According to the POA, 3 and only 3 parcels of land at Keppel, Kranji and Woodlands had been agreed for joint development. All other MRA lands would be returned to Singapore without compensation. There was no provision in the POA for 60:40 joint development of Bukit Timah site. The Bukit Timah station was also to be built economically. If Malaysia found the station at Bukit Timah unsuitable, the land and the station would revert to Singapore under the terms of the POA.

Tun Daim Zainuddin wrote to Senior Minister Lee in December 1993. In that letter, Tun Daim proposed that:

"as the land area at Bukit Timah is substantial, it should be shared on 60:40 basis which is the same ratio for the rest of the parcels of land which we had agreed to develop. I think it is fair. If this is agreed, then Railway will consider moving straight to Woodlands."

Senior Minister replied to Tun Daim in January 1994 to point out that the terms of the POA were very clear and under those terms the land at Bukit Timah was not among those lands to be jointly developed. Senior Minister said:

"As long as the station was in Bukit Timah, the other two large pieces of land in Kranji and Woodlands could not be developed. ... Only when Malaysia had vacated the Bukit Timah railway station, would these two pieces at Kranji and Woodlands be developed. Point 3 of the Points of Agreement gave Malaysia the option to move the station to Woodlands within five years of the MRT reaching Woodlands."

"In other words we had agreed on strong incentives for the station to move to Woodlands. At the time of the agreement in November 1990, I knew that KTM would sooner or later have to move to Woodlands. The old Bukit Timah trunk road was being replaced by a new island-wide network of expressways. The Bukit Timah area has no MRT and is becoming a low rise residential area."

"I believe that I was fair when I agreed to Malaysia's 60% and to Singapore's 40% share, in developing the three major pieces of land. Some in the Cabinet thought that I was generous and should have stuck to the 50:50% formula. I favoured an agreement because I did not want this problem to trouble relations between the two countries later."

Legal position: Proper interpretation of the POA

Some members referred to the recent replies from the Singapore Government in the New Straits Times and the Straits Times on matters concerning the POA. They were necessary because on both occasions erroneous accounts of the POA and developments subsequent to it had been published. We had to respond in order to set out both the facts and the correct legal position.

The NST article and our reply

On 19 March 1997, the New Straits Times carried a story, "Differences hold up plan to develop KTM's S'pore land". The article gave an inaccurate account of the POA. For example, the article claimed that lands in Kranji, Woodlands and Tanjong Pagar would be handed over to KTMB when the station moved to Bukit Timah, and that the land exchange offered in Marina South was not on par with the land in Tanjong Pagar.

Accordingly, the Permanent Secretary of the Ministry of National Development, Mr Lam Chuan Leong wrote to the New Straits Times to point out these inaccuracies and set out the main terms of the POA.

However, in carrying our reply, the New Straits Times edited out one key point and refused to make the necessary corrections as communicated in writing by Permanent Secretary (National Development).

The New Straits Times also refused to accept an advertisement by the Singapore Government to point out that NST had edited our letters without our consent. We therefore had to buy advertising space in the Straits Times on 15 May 1997 to put our clarification on record.

Reply to KTM's letter in the Straits Times

Finally, let me refer to the letter by the Managing Director of KTMB, Dato Abdul Rahim Osman which appeared in the Straits Times of 13 May 1997. The letter claimed that the Agreement (ie. the POA) "would be operative only upon Malaysia initiating what is agreed upon". That is to say:

The POA is not yet operative; and

The POA would only come into force when the Malaysian government unilaterally decides to initiate what is agreed upon (ie. to vacate its railway station in Tanjong Pagar).

Our Attorney-General has advised that this is clearly not so. Accordingly, the Permanent Secretary of the Ministry of Law, Mr Goh Kim Leong, replied on 26 May 97 to set out the correct legal position. In his reply, Mr Goh Kim Leong pointed out that:

"The Points of Agreement is a government to government agreement between Singapore and Malaysia which took effect and became operative on 27 Nov, 1990, the day that it was signed by Mr Lee Kuan Yew on behalf of the Government of Singapore and Tun Daim Zainuddin on behalf of the Government of Malaysia.

"It is an established principle of law that where an agreement does not stipulate a fixed date for performance, it has to be performed within a reasonable time. This principle applies to the 1990 Agreement, with Point (3) of the Agreement delimiting the maximum period for the railway station to be moved from Keppel, that is within five years from the time the MRT reaches Woodlands New Town, which it did on Feb 10, 1996."

Concluding Remarks

Mr Speaker Sir, the POA was an agreement concluded by the two Governments after careful deliberation by both sides. It is an internationally binding Agreement which should be implemented in good faith. I have taken some time to spell out the background and the terms of the Agreement because we have to place on record that Singapore has adhered to the terms of the Agreement.

Mr Speaker, Sir, in closing, let me say that Prime Minister Goh Chok Tong strongly believes in close cooperation between Singapore and Malaysia for mutual benefit. While the PM and the Government of Singapore are bound by the terms of the POA, PM Goh has made strenuous efforts to move the bilateral relationship forward in a way that would overcome the problems posed by the Malaysian Government's desire to change POA. Thus, he has proposed his Framework of Wider Cooperation, a subject which he will elaborate when he takes the floor.

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