News & Views

With the extension of the Movement Control Order, the need to regulate social and business activities beyond a blanket restriction of movement, has become more apparent. This includes the power to identify and legitimise acceptable compromises within the general movement restrictions to enable some business sectors to resume, which includes any necessary conditions for a relaxation. However this has also raised questions relating to the authority of the government to make these regulations under existing legislation.

Background

In our previous update dated 10 April 2020, we considered the legality of the Covid-19 lockdown enforced pursuant to the Prevention and Control of Infectious Diseases (Measures Within Infected Local Areas) Regulations 2020 (the “MCO Regulations”)  gazetted by the Health Minister, pursuant to powers conferred on him under Sub-section 11(2) of the Prevention and Control of Infectious Diseases Act 1988 [Act 342] (the “Act”). Since the initial gazette, these regulations have been further amended and extended until 12 May 2020. The MCO Regulations permit people to leave their homes  “to perform any duty in relation to any essential services”.  A list of the “essential services” is provided in the Schedule of the MCO Regulations.

New permitted businesses and standard operating procedures

On 10 April 2020, Senior Minister Datuk Seri Azmin Ali, who is the International Trade and Industry (“MITI”) Minister announced  that the Malaysian Government would allow a list of industries to operate during the MCO period in addition to the “essential services” already expressly provided for in the MCO Regulations (“Additional Industries”).  

Additional Industries includes services and activities previously deemed non-essential and could be allowed through an online application through MITI’s website. On its website, MITI has, to date, provided the following standard operating procedures and protocols for approval to operate the Additional Industries during the MCO Period:

• of employees for laundromats, hardware, electrical and electronic premises or companies during the MCO Period. (“Dobi, Hardware, Electrical and electronic Guidelines”)
• Standard operating procedures and guidelines for operation of traditional and complimentary medical services on premises (“Traditional and Complimentary Medical Services Guidelines”}
• Standard operating procedures and guidelines for operation as well as movement of employees for the legal service sector during the MCO Period. (“Legal Services Guidelines”)
• Standard operating procedures and guidelines related to the construction sector; (“Construction Sector Guidelines”)
• Standard operating procedures and guidelines for operation as well as movement for manufacturing companies during the MCO Period. (“Manufacturing Guidelines”)
• Standard operating procedures and guidelines for operation as well as movement of employees for research and development industry. (“R&D Guidelines”)

(collectively the “SOPs”)

Of these, only the Traditional and Complimentary Medical Services Guidelines were prepared by the Health Ministry. The Legal Services Guidelines were prepared by the Legal Affairs Division of the Prime Minister’s Department, the Construction Guidelines were prepared by the Ministry of Works & the  Construction Industry Development Board Malaysia, the R&D Guidelines were prepared by the Ministry of Science Technology and Innovation while the remaining guidelines were all prepared by MITI.

The General Guidelines state that all the relevant ministries and agencies (including the Health Ministry) have access to the MITI portal and all information provided on the MITI portal will be made available to the relevant ministry or agency for processing. The General Guidelines also state that the relevant ministry or agency will give their view on whether the applicant is allowed to carry out its operation and that the processing of the applications involves cross referencing with many relevant databases at the ministry level and the agency level.

What authority do ministries other than the Health Ministry have to impose conditions in respect of essential services under the MCO Regulations?

It is trite to mention that in a constitutional democracy, people are free to do what they wish unless prohibited by laws such as the Penal Code and other Acts of Parliament that impose penalties or approval for certain activities. Unless the law permits government agencies to regulate activities in a free society, freedom to conduct social and economic activities must be presumed to exist. Therefore, no minister may make ad hoc decrees.

It is worth remembering that the source of today’s movement restrictions arise out of a health legislation that is not designed to regulate the economy at large or prescribe how businesses should be operated.

Notwithstanding, on 16 April 2020, Senior Minister Datuk Seri Azmin Ali revealed that “MITI is also collaborating with the police and the Department of Labour to monitor the activities of the industries required to comply with the SOPs” He added that “failure of companies to comply with the SOPs will result in the immediate revocation of their approval to operate as well as legal action according to the existing laws”. The MITI Minister is also reported to have said offences committed will be going against the Prevention and control of Infectious Disease (Measures within the Infected Local Area (No. 2) Regulations 2020. Those regulations, however, make no mention of any of the SOPs.

The Minister’s statements which encompass a wide range of businesses and social activities suggest that there is legal and constitutional authority to direct these activities through the SOPs. However, none of these SOPs appear to have been gazetted pursuant to any existing legislation. It may well be that certain business have to conform to the terms of ministerial licences but such licences would expressly state the conditions for their use and validity. It would be unusual for any licensing authority to reserve a general right of revocation based on grounds not hitherto made known to the licencee. This would make commercial life and business in a free and open economy such as Malaysia’s, very uncertain and unattractive.

Consequently, the MITI Minister’s statements raise questions as to whether these ministries and departments other than the Health Minister (in accordance with the Act) have the authority to declare the Additional Industries as “essential services” under the MCO Regulations, and impose conditions for their operation outside of what is currently stated in the MCO Regulations. It also raises the question as to whether a breach of the SOPs could result in an offence in the absence of express legislation empowering the MITI minister to impose these penalties.

Section 11 of the Act only provides that the Health Minister ”may, by regulations made under this Act, prescribe the measures to be taken to control or prevent the spread of any infectious disease within or from an infected local area.”  This draws into question the power of other Ministers   to create their own regulations under the Act.

Essential services

The Schedule of “essential services” under the MCO Regulations currently includes “Any services, works or industries declared by the (Health) Minister after consulting with the authorities regulating the services, works or industries”. To our knowledge, the Health Minister has not declared any of the Additional Industries referred to in the SOPs as “essential services” under the MCO Regulations. As such, it may be questioned whether Additional Industries are “essential services” pursuant to the MCO Regulations.

SOPs

The MCO Regulations themselves do not provide any operating procedures in respect of the permitted conduct of the “essential services”. While the Health Ministry has issued some general recommendations in terms of social distancing measures to be taken at home and in the work place, these recommendations have been advisory in nature and do not provide binding regulation regarding the conduct of “essential services”. Regulation 11(1)  of the MCO Regulations only provides  penalties for “Any person who contravenes any provision of these Regulations or any direction of the Director General or any authorised officer” upon conviction.  To our knowledge, neither the Health Minister, the Director General nor any “authorised officer” as defined in the Act, has declared or directed that breach of the SOPs constitutes an offence under the MCO Regulations. This again draws into question the MITI Minister’s reported claim that breach of the SOPs would amount to an offence under the MCO Regulations.

Conclusion

The Malaysian Government’s current model of employing various ministries to address the concerns and issues of the various Additional Industries it seeks to reintroduce for reopening part of the economy during the MCO period and coordinating all applications from those Additional Industries through a single ministry, is well-intentioned and arguably pragmatic.  However, its legal basis under the current framework of the MCO Regulations or the Act may be the source of unexpected litigation and legal challenge. 

Instead of relying solely on the Act and regulations made under it, it may be preferable that fresh legislation be passed that caters specifically for the exigencies of a pandemic and the needed regulation of the economy during a shut down similar to the Coronavirus Act 2020 of the United Kingdom. The latter deals with a wide range of circumstances (not previously contemplated by prevailing laws) such as human resource management, regulation of gatherings, moratoria on litigation by landlords and operation of ports, amongst many other areas that are affected and require constructive legal remedies.

However, with a full parliamentary sitting not expected until July, an unsatisfactory regulatory environment will persist giving rise to many potential legal disputes.

RLSE Regulations Team (admin@rlse.law)