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NEA reviews contractual terms with social entreprises managing hawker centres

In a press release published on Friday (9 Nov), National Environment Agency (NEA) announced that it has reviewed key contractual terms between the five socially-conscious enterprises managing the seven new hawker centres and stallholders. The five operators are Fei Siong Social Enterprise, OTMH,Timbre+Hawkers, Hawker Management, and NTUC Foodfare Co-operative.

This announcement follows the recent public furore over how hawkers are being squeezed by the social enterprises at the NEA hawker centres with overbearing terms and conditions, seeking increased payment from the hawkers and control over how the hawkers conduct their business. However, NEA states that this review is the recognition that hawkers are central to the hawker trade and Singapore’s hawker culture.

“Our hawkers are dedicated entrepreneurs, and they face the challenge of maintaining a balance between providing affordable food and business costs. The current median age of our hawkers is 60, while the hawkers in our new hawker centres are generally younger at a median age at 43. As the older generation of hawkers continue to age, we need to attract new entrants to ensure the sustainability of the hawker trade.” said NEA.

It added, “To sustain our hawker trade, NEA has and will continue to work with operators and hawkers to maintain the vibrancy and viability of our new hawker centres, to meet the needs of the public for accessible and affordable food. We also recognise that new hawker centres need time to establish themselves and build-up a clientele. Hawkers would thus benefit from more flexibility in the way they operate their stalls than today, even as we experiment with new management models, and seek new and better ways to sustain the hawker trade.”

It shared that it has heard a range of feedback from hawkers as well as members of the public, whom its hawker centres serve, on some of the contractual terms the operators have with the stallholders at the new hawker centres. And over the past three weeks, NEA has reviewed some of these key contractual terms with a view to better safeguard the well-being and interest of the hawkers.

Following discussions with the operators, all of them have agreed to make changes to the following contractual terms, with effect from 1 January 2019. These changes are made as an immediate priority in NEA’s review.

Stall operation days/hours

Stallholders may operate at least five days a week, and if they wish to, continue to operate for more than five days. Operators will offer stallholders options on their operating hours. For stallholders who wish to operate more than eight hours a day, operators would engage them on how they plan to do so and if they would have sufficient manpower, e.g. self-operations, or with the help of stall assistants or joint operators. Stallholders are encouraged to work with the operators to schedule their off-days to ensure that the needs of residents and patrons continue to be well-served.

Termination notice periods and security deposits

Stallholders would be allowed to terminate their tenancies by giving operators sufficient notice. The notice period required by the operator should be not more than two months. The security deposit held by the operator would also be no more than two months’ rent. If sufficient notice is served by the stallholder, the operator would not forfeit the security deposit, nor require the stallholder to pay rent of more than two months or until a replacement stallholder is found, unless the stallholder has breached the tenancy agreement or caused damage to the stall premises.

Other charges

In some cases, operators may impose liquidated damages for regulatory or other breaches. These should be kept reasonable, at no more than $50 for minor ones and $100 for major breaches.

Operators should strive to keep business and administrative costs reasonable for hawkers. In this regard, operators would bear all legal fees that they may incur arising from the preparation and execution of the agreements with the stallholders, except for any stamp duty payable by the stallholders.

NEA noted that it will continue to review the other contractual terms and make changes as necessary.

However, one will note that nothing has been said about the increased expenses faced by the hawkers.

Hawkers’ feedback group sessions

NEA said it will continue to work with both operators and stallholders to ensure that the needs of the public for accessible and affordable food is met, while ensuring a decent livelihood for our hawkers. It is also said that all operators have answered NEA’s call to form hawkers’ feedback groups in the hawker centres they manage, and at least one feedback session has been conducted in each of the seven new hawker centres.

NEA said it will continue to engage these feedback groups to clarify and make adjustments, so as to better address challenges faced by hawkers.

Noting that socially-conscious enterprises currently manage seven new hawker centres, out of a total of 114 centres, it argued that the implementation of this management model for new hawker centres is still at an early stage, and should be given more time to evolve.

“NEA will ensure that the model continues to achieve the social outcomes of our hawker centres: to provide accessible and affordable food in a clean and hygienic environment, allow our hawkers to make a decent living, and build-up our new hawker centres as our community dining rooms. NEA will continue to seek feedback from hawkers and patrons, and make further refinements in our overall stock-take of the model.” said NEA

SEHC introduced by Dr Vivian BalaKrishnan in 2012

At a Parliamentary debate on 6 Mar 2012, then-Environment and Water Resources Minister, Dr Vivian told the House, “We intend to accept the recommendations (by Hawker Centre Public Consultation Panel) and the management of the new centre should be by social enterprises, probably a co-operative, and I hope there will be more than one co-operative or other social enterprises that will step up to the plate.”

He said that details of such social enterprise hawker centres like who to accept as a hawker, the food mix and pricing, should be done at the local level rather than at the Ministry level. “I do not want, on the Ministry level, to be overly prescriptive,” he said.

In response to queries by fellow Members of Parliament on the proposed scheme, Dr Vivian said,

First, I have to persuade all of you to accept that hawker centres are social infrastructures. Therefore, as the ultimate landlord, we are not trying to maximise rentals from it.

I am keen to accept the recommendation for social enterprise because, if you remember, when I first announced that we would reverse this policy, I said that I wanted the management to be a not-for-profit model. Basically, you still need to be viable and to make ends meet. But you are not out there as a real estate player and you are not engaging in arbitrage. And what starts off as a hawking business becomes a real estate business. All this is very easy to express but I am not going to underestimate the difficulty of making it work in practice.

In the context of Singapore, the most successful co-operative is FairPrice. I give all due respect to Mr Seah Kian Peng. It is a social enterprise, it has fulfilled a social mission of ensuring commodities and essential food are priced reasonably and provides competition. What I am hoping to do by changing this hawker centre policy is, number one, increase the supply of places. That should have some effect on prices, both in terms of rental as well as the prices charged by hawkers. But having said that, I do not believe that simply lowering rentals by itself will necessarily lead to lower prices charged by hawkers. At the end of the day, they are people making a living. They will also try to charge what the market will bear.

With what transpired in recent weeks and the revelations from the hawkers themselves, what Dr Vivian promised and said, leaves much to questioned.

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