Chan didn’t disclose that there is no economic needs test or quotas on agreed services under CECA

Trade and Industry Minister Chan Chun Sing said on Saturday (9 Nov) that the Singapore-India Comprehensive Economic Cooperation Agreement (CECA) does not grant Indian nationals unconditional access into Singapore or immigration privileges (‘CECA does not grant Indian nationals unconditional access, immigration privileges: Chan Chun Sing‘).

Claims that the bilateral agreement has cost job opportunities for Singaporeans aim to stoke fears in times of economic uncertainties, said Chan. Among these was the claim that CECA has allowed Indian nationals to take PMET jobs away from Singaporeans.

“Indian professionals, like any other professionals from other countries, have to meet MOM’s existing qualifying criteria to work in Singapore. This applies to Employment Pass, S Pass, and work permit,” he said.

Chan further pointed out that Singapore’s network of FTAs has in fact increased these jobs by 400,000 to 1.25 million since 2005. But he did not mention specifically how many of the 400,000 created jobs were due to CECA and how many went to Singaporeans.

“We understand, and we share Singaporeans’ concerns with competition and job prospects in the current uncertain economic environment. But the way to help Singaporeans is not to mislead them and create fear and anger,” said Chan.

“The way to help Singaporeans is to make sure that first, we expand our markets for our enterprises. Train our workers constantly to stay ahead of competition. Never allow others to stoke the fears and racial biases of our people. Never do this for selfish personal or political reasons,” he added.

CECA allows “intra-corporate transferees” to work for up to 8 years in host country

However, Singapore has been quite liberal in granting work passes to Indian nationals working in Singapore since CECA was signed in 2005. Under CECA, it enables movement of people between the 2 countries:

  1. Professionals who are employed in 127 specific occupations are allowed entry and can stay for up to a year to “engage in a business activity as a professional”. The person would need to produce “letter of contract” from the party engaging the services of the said person. Some of the stated occupations include: engineers, architects, IT personnel, surveyors, doctors, dentists, accountants, lecturers, auditors, analysts, etc. CECA did not say they can’t go back to the host country to work again under a new contract for another year after their current contract ends.
  2. Intra-corporate transferees will be permitted entry and can work for up to 2 years. This can be extended to a total term of not more than 8 years;
  3. Business visitors who hold five-year multiple journey visas will be permitted entry for business purposes for up to 2 months, with an option to extend by an additional month; and
  4. Short-term service suppliers will be allowed entry to service their contracts for an initial period of 90 days.

Note that for intra-corporate transferees, it is defined as an employee who has been employed for a period of not less than either six months in company and one year industry experience or three years industry experience immediately preceding the date of the application for entry.

There is also no quota requirement imposed on intra-corporate transferees, which means an Indian company can hire a whole “village” of staff and transfer them to Singapore 6 months later lock, stock and barrel.

Furthermore, under Article 9.3 of CECA, all the “intra-corporate transferees” are to be exempted from any “labour market testing” or “economic needs testing”. That means, economic needs testing like Singapore’s fair consideration framework which ensures fair hiring of Singaporeans cannot be applied to “intra-corporate transferees”.

To top it all, Article 9.6 even allows the “intra-corporate transferees” to bring in their spouses or dependents to work here too.

Indian IT companies exploiting CECA loophole

Thanks to CECA, large number of Indian IT workers were moved into Singapore as “intra-corporate transferees”, since CECA did not set any quotas. Many of these Indian IT companies reside in Changi Business Park. Few Singaporeans, if any, were hired.

But in last few years, with many Singaporean PMETs complaining about discriminatory hiring practices as well as an increase in unemployment rates among Singaporean PMETs, the Singapore government started to slow down the approvals of Indian professionals working here.

Times of India reported in 2017 (‘Singapore blocks visas for Indian IT professionals‘) that work visas for Indian IT professionals to work in Singapore have dropped “to a trickle”, prompting the Indian government to complain to Singaporean government citing violation of the trade pact. Some of the Indian IT companies affected include: HCL, TCS, Infosys, Wipro, Cognizant and L&T Infotech.

“This (visa problem) has been lingering for a while but since early-2016, visas are down to a trickle. All Indian companies have received communication on fair consideration, which basically means hiring local people,” the president of Nasscom, the IT association of India, complained.

That means in the ten years or so from 2005 to about 2015, these companies have been gladly receiving work visas “happily given” to them by the Singapore government for their staff to work in Singapore under CECA, since no complaints were publicly ever heard from these companies in those “happier times”. In any case, the damage has been done. Displaced Singaporeans who ended up driving taxi would have a hard time getting back to a working career again.

In retaliation, the Indian government decided against expanding the scope of goods where import duties for Singapore goods would be cut unless the concerns of Indian industry are addressed, the report added.

In particular, the Indian government is against Singapore using the “fair consideration framework” to regulate the employment of Indian professionals in Singapore. “They (Singapore) are doing it despite the CECA clearly stating that there will be no ENT (economic needs test) or quotas on agreed services. This is a violation of the agreement,” warned an Indian official.

DPM Tharman questioned in India

In 2017, Deputy Prime Minister Tharman Shanmugaratnam visited India and spoke at an economics forum organized by the Indian Finance Ministry. He was asked point-blank about the sudden curtailing of Indian professionals moving into Singapore. DPM Tharman replied that there must be limits to the movement of people. Otherwise, there will be less push for businesses to be more productive, and “more fundamentally, you become a society where people don’t feel it’s their own society”, he said.

“It would be mindless to have an open border without any policy framework to govern and constrain the flow of people into your job market. It will not just be wrong politics but wrong economics.” said DPM Tharman.

In fact, prior to 2015-16, Singaporean PMETs working in the financial industry were already complaining about discriminatory hiring practices. In 2013, DPM Tharman and then Manpower Minister Tan Chuan Jin had to call up some banks in Singapore to ask them to stop the practice of “hiring their own kinds”. This was revealed in Parliament by Minister Tan in 2013.

Minister Tan did not name the banks nor the nationalities of the hiring managers but many netizens have pointed that DPM Tharman and Mr Tan must have spoken to some of these foreign banks which were dominated by Indian nationals.

Under CECA, Singapore became India’s top investor but it is believed that the investments mainly came from Singapore government and Government Linked Companies under Temasek, like DBS, Sembcorp, Ascendas, etc.

So, even though Chan said CECA does not grant Indian nationals unconditional access to work in Singapore, many were allowed into Singapore especially in the first 10 years after CECA was signed, competing with Singaporean PMETs for jobs and damaging Singaporean interests. Otherwise, why would DPM Tharman and then Manpower Minister Tan want to talk to those banks in Singapore?