SINGAPORE Law and Practice Contributed by: Joseph Chun, Shook Lin & Bok LLP
a director, manager, secretary, or similar officer of the company is also considered guilty of the same offence. However, the officer can avoid liability if they can demonstrate that the offence by the corporate entity occurred without officer’s consent, connivance, or negligence. 6.2 Environmental Taxes Environmental taxes in Singapore include: • carbon tax (a tax on GHG emissions) under the CPA; • water conservation tax (a tax on water consump- tion) and waterborne tax (designed to cover the cost of treating used water and maintaining the used water network) under the PUA; and • vehicular emissions tax (a tax on the pollutant emission intensity based on the design specifica- tions of a motor vehicle) under the RTA. 6.3 Incentives, Exemptions and Penalties Within emission-intensive trade-exposed sectors, the performance on specified energy efficiency or GHG emission intensity benchmarks or decarbonisation plans of a company may be a consideration when the Minister is deciding the number of transitory allow- ances to award the company under the CPA (the greater the number of transitory allowances awarded to a company, the less carbon tax it must pay for its emissions). The adoption of sound environmental management systems, as evidenced by voluntary certifications such as ISO 14001, may be considered a form of due diligence and thus a defence against strict liability environmental offences. Environmental legislation may provide for repeat offenders to be subject to higher maximum punish- ment than first-time offenders. Judges may also con- sider higher penalties for repeat environmental offend- ers. 6.4 Shareholder or Parent Company Liability The general rule is that a company is a separate legal person from its shareholders or parent company. Shareholders and parent companies are therefore
generally not liable for the environmental damage or breaches of environmental law. In exceptional circumstances, courts may “pierce the corporate veil” to hold a shareholder attempting to shelter behind a corporate facade to hide his crime and his benefits from it. Under the THPA, it is an offence for an entity to par- ticipate in the management or operational affairs of another entity that is an owner or occupier of land out- side Singapore and engages in conduct that causes or contributes to haze pollution in Singapore at or about the time there is haze pollution in Singapore. 6.5 ESG Requirements ESG requirements in Singapore have been outlined below. • The Singapore Exchange (“SGX”) Listing Rules require listed issuers to provide an annual sustain- ability report on a “comply or explain” basis. The sustainability reporting process must be subject to internal review. • Listed issuers must also make climate related dis- closures as follows: (a) for financial year commencing (“FYC”) 2025, all listed companies must report their Scope 1 and 2 GHG emissions in accordance with the International Sustainability Standards Board (“ISSB”)’s IFRS S2 disclosure standard, but Straits Times Index (“STI”) constituents (the top 30 companies by market capitalisation on the SGX Main Board), are also required to make most of the ISSB climate-related financial dis- closures (Scope 3 GHG emissions excluded); (b) for FYC 2026, STI constituents must report Scope 3 GHG emissions; (c) for FYC 2028, non-STI constituents with a market capitalisation of at least SGD1 bil- lion must also make the ISSB climate-related financial disclosures (Scope 3 GHG emissions excluded); (d) for FYC 2029, all listed companies must obtain external limited assurance for Scope 1 and 2 GHG emissions; and (e) for FYC 2030, non-STI constituent listed com- panies with a market capitalisation of less than
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