Tay Partners

Covid-19 (3 August 2020)

DOES MALAYSIA STILL NEED THE COVID-19 BILL?

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After several months of braving through the darkest times brought about by the Covid-19 pandemic, life in Malaysia has to a certain extent returned to normal, with certain precautions still in place. Since Malaysia had consistently reported low single-digit number of new Covid-19 cases daily, businesses have started re-opening, economic activities have resumed and domestic travel has begun again. However as of late, there have been concerns about a possible second wave of Covid-19 infections in Malaysia as the number of daily infections begins to rise to double digits.

Despite all of these developments, the proposed Covid-19 Bill which was meant to address the impacts of the Movement Control Order (MCO) from 18 March to 9 June 2020 is only about to be debated in Parliament. Previously we had called on the government to provide a timely response to the impacts of Covid-19 by including certain measures in the Covid-19 Bill and to pass the Bill as soon as possible.

However, the Parliament had only recently convened its second sitting for a period of 25 days from 13 July to 27 August 2020. The Finance Minister had stated that the Covid-19 Bill will be similar to what has been implemented in other countries such as Singapore and New Zealand.

From “in desperate need of” to “we no longer need”?

It is pertinent to note that other jurisdictions across the world had long ago passed their respective Covid-19 legislations in order to provide a timely response to the impacts of Covid-19. For example, our neighbour Singapore had passed the Covid-19 (Temporary Measures) Act 2020 as early as 7 April 2020. Even if the Malaysian Covid-19 Bill adopts the best possible measures from other legislations, it may be too late for the Bill to only now mitigate the impacts of the MCO.

 

The MCO, which lasted for almost 3 months, had caused significant economic impacts to the country and to people’s livelihood. Businesses were burdened with having to bear their overhead costs while having zero income. The financial assistance introduced in various stimulus packages were undoubtedly helpful to some businesses, but struggling businesses that could no longer bear their operating costs were left with no choice but to close down and cease operations. The impact could be seen from the unemployment rate which had spiked to 5.3% as of May 2020, which is the highest in 30 years. Even if the Covid-19 Bill is passed, the government could no longer breathe life into businesses that had to shut down because they could not afford to pay rentals and salaries.

After the MCO, businesses that have managed to weather the storm may find less competitors on the market. These businesses, although impacted by the Covid-19, is now ready to resume their operations and recover from the impacts of MCO. Airline companies and the tourism industry are also looking at positive growth as demands for domestic travel had begun to increase. Businesses have taken heed from the previous unprecedented MCO and have improved their risk-preparedness and strategies to face a possible second wave. To have the government intervening now when businesses are ready to resume their normal operations might be a hindrance instead of assistance. For example, it may be too late for the Covid-19 Bill to declare the MCO as a force majeure event as previously demanded by businesses, when by now most affected businesses would have addressed any contractual breaches during MCO and reached amicable settlements with other parties.

Further, the public in general is ready to move on and take charge of their lives once again. The MCO had led to the rise in the number of people participating in the gig economy. Businesses have taken the initiative to shift towards online platforms, which had led to a boom in the e-commerce development in Malaysia.

Ship has sailed

Therefore, any initiative in the Covid-19 Bill, if meant to address the impacts of MCO almost 4 months after it first started, would be redundant and may even backfire. The market has managed to recover to a certain extent even with limited intervention from the government. If the Parliament wishes to pass a Covid-19 Bill at this juncture, it should not be about rectifying the impacts of the previous MCO. Instead, it is advisable for the government to focus on measures to further support the growth of Malaysian economy post-MCO, as well as improving our level of risk-preparedness for a possible second wave.

Leonard Yeoh and Nurul Qarirah are advocates and solicitors practising in Kuala Lumpur.



Leonard Yeoh
Partner
T: +603 2050 1973
M: 012-321 6893
E: leonard.yeoh@taypartners.com.my


Nurul Qarirah
Associate
T: +603 2050 1971
E: nurul.qarirah@taypartners.com.my