Out Of The Haze, A Singapore Spring?
By Eric EllisJune 25, 2013
The haze sweeping Asia is a hazard to your health — and for members of Singapore’s ruling elite such as the mercurial K. Shanmugam, a threat to your tight grip on power, too.
When you are Singapore’s Lee family, and your clan has exercised absolute and uninterrupted control over its swanky specklet of Asia for 54 years, fellows like Kasiviswanathan Shanmugam are handy to have within your power court.
K. Shanmugam, as he’s less tongue-twistingly known, may have escaped the attention of those unfamiliar with the cosy connections that hold Singapore’s power elite together — a warm, clubby embrace that has kept them very wealthy.
But 54-year-old Shanmugam is a bigwig on the tiny island, which is currently being suffocated by pollution from the periodic burning of millions of hectares of palm oil plantations that have trashed the equatorial habitat of neighbouring Indonesia. That pollution from the illegal fire-clearing of these plantations has swept on eastward winds from Sumatra in massive clouds of smoke and ash to shroud and choke Singapore, southern Malaysia and large tracts of western Indonesia.
Call it blowback. Many of these plantations are owned by people with intimate connections to that same power court in Singapore, who helpfully provide them all manner of metropolitan usefulness, banking their billions and domiciling their empires while discreetly looking past, er, indiscretions that may have been perpetrated elsewhere.
Singapore has 101,000 millionaires officially resident on the island, their assets tucked safely away in the nation’s banks, property and share markets. Plenty of these plutocrats are normal Singaporeans who’ve done well in business. But many are not, like corrupt Indonesians on the run, or Burmese generals seeking safe haven. Singapore’s plutocratic ranks have been swelled in recent years by Europeans and Russians seeking relief from tax and the prying regulators of home, these exiles spending just enough time and money in Singapore to qualify for residency.
This, to many, is the useful point of Singapore, where Shanmugam – born in 1959, the very year Lee family patriarch Lee Kuan Yew began his three decades as ruler – has been an MP since 1988 for the Lees’ ruling People’s Action Party (PAP).
Shanmugam’s story, and there are many like it in Singapore’s political circles, neatly illustrates how power flows in Singapore, via an apparatus ironically made more visible by the haze crisis.
There have been five parliamentary elections since then in Singapore’s almost-democracy, three of them relatively leisurely affairs for Shanmugam; he and his PAP friends were untroubled by any other candidates in their constituency, Sembawang, an area perhaps best known for its US naval facility.
But Shanmugam’s selfless devotion to public service – Singapore MPs receive a basic annual allowance of around US$200,000 – hasn’t hindered an even more lucrative career, in law and business. He’s one of Singapore’s most formidable litigators, a leader of the army of Lee-loyalist lawyers who’ve helped win their legal system a contentious reputation as a jurisdiction, most notably in defamation.
Singapore is one of the world’s libel capitals, and its litigants – many have been colleagues of Shanmugam, leaders of the ruling PAP – have won record-setting damages for defamation by their political rivals and the international media.
What would pass as the normal buffeting of election debate in most genuinely pluralist democracies has been, in Singapore, a device of oppression. Here, sensitive politicians and officials, famously led by the Lees themselves, have shown an enthusiastic inclination to sue opponents into penurious legal submission. Singaporean officials, it’s often said, can imagine libel and slander in a harsh glare.
All of which helps explain why MPs like Shanmugam don’t always encounter combatants when they run for election. Indeed, this absence of opposition has meant that there’s only been three parliamentary elections in Singapore in the five since 1988 in which the PAP wasn’t returned to office on nomination day – the actual poll being largely irrelevant as to decide who runs the country.
Shanmugam doesn’t mind highlighting such powerful connections in his sparkling official CV, now for the Nee Soon electorate in Singapore. This biography describes a storied student who became a ‘star litigator’ for Singapore’s biggest law firm, a lawyer who has represented prime ministers past and present.
And, busy man, Shanmugam has also served on some illustrious boards while being MP and lawyer-at-large, his biography reveals. For example, he’s held a long and lucrative directorship at one of Singapore’s state-controlled blue chips, Sembcorp (a post he shared with strongman Lee Kuan Yew’s daughter-in-law Lee Suet Fern, whose husband ran Singapore Telecommunications for 12 years), and another on Singapore’s state media regulator, among other establishment posts.
Now Shanmugam has been Singapore’s Foreign Minister since 2011, and Minister for Law since 2008, his official salary now somewhere north of $US1 million. He’s the senior official entrusted by his Prime Minister, Lee Kuan Yew’s son Lee Hsien Loong, to go after the polluters they believe are responsible for the life-threatening haze, now too thick to ignore, which has engulfed their region.
“If any Singapore companies are involved,” thundered PM Lee last week, “or companies which are present in Singapore are involved, we will take it up with them."
Indeed, Jakarta has helpfully identified as many as 14 companies it believes responsible for the muck, while reminding Singapore that many more Indonesians are suffering its effects than inhabitants of the look-at-me island nation.
Two of the companies fingered by Indonesia are its Widjaja family’s Sinar Mas Agro Resources and Technology (SMART), which has long been a target of environmentalists, and Asia Pacific Resources International (APRIL), controlled by the Indonesian-born Singaporean tycoon Sukanto Tanoto. Both are based in Singapore, where SMART’s parent company is the locally listed Golden Agri-Resources.
And this is where Lee’s Foreign and Law Minister K. Shanmugam comes in again.
Two of the directorships that don’t appear in Shanmugam’s glittering CV are his former stints as a director of Golden Agri-Resources and Asia Food and Property Ltd.
Both are Singaporean companies controlled by Indonesia’s controversial Widjaja family. In the early 2000s, while Shanmugam was on these boards, the Widjajas had the dubious honour of owning the notorious Asia Pulp and Paper, which would come to be responsible for the biggest bond default in corporate Asian history.
What transpired at APP was a US$13 billion fiasco, a scandal largely unearthed by the pesky foreign media, and which exposed Singapore as something other than the squeaky-clean financial centre its government likes to internationally promote itself as. Transferring public company funds through a murky family-controlled bank in the tax haven of the Cook Islands was a sleight of hand much favoured by the Widjajas.
No-one involved with the APP scandal was ever prosecuted or brought to legal book anywhere. Those foolish enough to have invested with the Widjajas absorbed huge hits. Most of APP’s debts were effectively written off and, like so many dodgy Indonesians and Singaporeans of that era, the Widjajas regrouped to do business another day – to pollute again.
As for Shanmugam, after firing off a few threatening legal salvos at the time to anyone who too publicly mentioned his connection to the Widjajas, he later resigned his directorships and resumed his legal and political career.
The Global Mail isn’t suggesting that Shanmugam was in any way party to the financial scandal that then engulfed the Widjaja empire. Indeed, all reports at the time suggested he was embarrassed by his links to the Widjajas. Nor are we saying that he is involved in the haze outrage that now engulfs them. And, despite being identified by Jakarta as a polluter, Golden Agri insists “there are no hotspots or fires” at its Sumatran plantations.
Should this assertion of innocence be proved wrong, Shanmugam, now as a minister, would at least know who to call when asked to bring miscreants to book; that is, if he doesn’t first recuse himself from official involvement given his one-time close links to the controversial Widjajas.
But that doesn’t seem likely. Last weekend, Shanmugam reportedly joined his PM and other government colleagues in handing out some of the million-odd facemasks Singapore has bought to distribute to low-income Singaporeans affected by the haze.
TGM emailed Mr Shanmugam a series of questions about his former links to the Widjaja’s Golden Agri but did not receive a response.
Singapore’s respiratory crisis has also shone a spotlight on some other local companies with interests in the controversial palm oil sector. One of them is particularly close to PM Lee, at the core Singapore’s politics-meets-business power apparatus: Temasek Holdings, Singapore’s influential state-owned investment company, which controls companies such as Singapore Telecom, Singapore Airlines and Australia’s Optus, also holds big stakes in myriad international businesses.
One of those investments is in CTP Holdings, Temasek’s Singapore-based joint venture with the US agricultural group Cargill. CTP operates oil-palm plantations in Indonesia. Last week, CTP was quick to say its holdings are well away from the current hotspots that have so polluted the Singapore environs. In any event, CTP’s backers claim their plantations operate a strict no-burn policy, and Temasek and Cargill have been keen to distance CTP and themselves from any environmental outrage.
Which is not how the US environmental lobby Rain Forest Network sees CTP’s operations in Indonesia’s Kalimantan region, to Singapore’s east; the group accuses CTP of clearing rainforest without permits, destroying watersheds and burning forests.
That Temasek was moved to publish a press release on the palm oil crisis at this time is itself instructive. It speaks to the rising opposition to Singapore’s Lee-led establishment, which revealed itself most eloquently in the last parliamentary and presidential elections, in 2011, in which the opposition not only fielded a record complement of candidates but made genuine gains against the PAP-dominated system.
Amidst the tumult from Tahrir Square and the tragedy of Syria, this ‘Singapore Spring’ hasn’t registered internationally with quite the impact of the Arab prototype that inspired it. But to the 5.3 million Singaporeans now coughing through yet another haze outrage blown in from Indonesia, their spring has arrived in the increasing accountability they demand of Singapore’s once impervious courtiers in running national affairs.
In a town where ‘normal’ political activity is deemed off limits, Temasek’s management has been a proxy political tool the opposition can fulminate about – Temasek as the symbolic vehicle of PAP patronage and performance.
Temasek and its likewise state-owned sister fund, the Singapore Government Investment Corporation, officially invest Singaporeans’ money. Like the more transparent sovereign wealth funds of democratic Norway and East Timor, and those more opaque in the Gulf monarchies, these two companies are national nest eggs owned by all Singaporeans, and in which every Singaporean notionally has a say.
Temasek, which by some measures has an interest in as much as 60 per cent of the Singaporean economy, has been run by PM Lee’s wife, Ho Ching, since 2003. And her patchy investment record would likely have seen her removed, had she performed similarly in any Western company. That record has increasingly been the subject of rational analysis, by academics and aspiring Singaporean politicians such as Kenneth Jeyaretnam, who would like to see these funds broken up and privatised.
Such transparency has been refreshing for Singaporeans, but other things don’t change. It remains out of bounds in Singapore to debate if Madame Ho got – and kept – her job because she’s a member of the Lee family. The last voice to publicly do this was a well-followed local blog, the Temasek Review Emeritus, which was swiftly threatened by one of the Lees’ notorious legal onslaughts en route to being forced into a grovelling apology. Today, it’s a rare Western media outlet – those with corporate interests or circulation in Singapore are particularly reticent – that will examine the Temasek record as they might similarly influential corporations elsewhere, such as Apple, Shell or BHP Billiton.
For media reporting on Temasek’s activities, official Singapore has insisted that it be accurate in its facts, and that it refer to Temasek as an “Asian investment company”. For good measure, Temasek would also prefer that any reference to Madame Ho as the PM’s wife be expunged. Singapore’s pliant media does what its told but foreign press is less observant of local sensitivities.
But the media, indeed anyone with cause to analyses Temasek, such as credit rating agencies and banks, can’t fulfill the latter requirements without noting the former.
Accuracy and investment decisions demand that Temasek be properly identified as being owned by the Singapore government. And there’s no avoiding the fact that Madame Ho, who often very publicly travels with her husband on state tours abroad, is Mrs Lee, a very powerful and wealthy Mrs Lee, if not always a particularly astute investor of her compatriots’ nest egg.
For all the putridness that the clouds now defiling Singapore and beyond are depositing, they may yet come with a silver lining, of more transparency for one Asia’s most rigid societies.