Malaysia Analytical Update - MCO Phase Two Reduction of Essential Services: April 3, 2020

Malaysia Analytical Update | April 3, 2020 
Authors: Kim Yaeger, Tina Jamaluddin, Emma Tabatabai, Alberto Coria, Nick Zuroski

Malaysia Reduces Essential Services List During Second Phase of Movement Control Order
In an April 1 federal gazette signed by Health Minister Datuk Seri Dr Adham Baba, the Malaysian government reduced the number of essential services allowed to operate during the Movement Control Order (MCO)—aimed at slowing the spread of COVID-19 in the country—to 10 essential services from the original 22.  Originally, port, dock, and airport services, fuel and lubricants, and hotels and accommodation were excluded from exemption under the MCO's second phase, but the government reclassified those sectors as essential services within 48 hours.  The latest list of exempted industries is as follows: 

  1. Food
  2. Water
  3. Energy
  4. Communication and internet
  5. Security and defense
  6. Solid waste and public cleansing management and sewerage
  7. Healthcare and medical including dietary supplements
  8. Banking and finance
  9. E-commerce
  10. Logistics for essential services.
  11. Transportation by land, water, or air (port, dock, and airport services)
  12. Production, refining, storage, and supply of fuel and lubricants
  13. Hotels and accommodation

Previously designated exempted services under phase 1 of the MCO may remain in operation if they are part of phase 2’s essential services, e.g postal services as part of communication and logistics; fire rescue services, prisons, immigration, and customs as part of security and defense; and petrol stations as part of energy.  The Council is continuing to engage the Malaysian government to better understand how this new order will be implemented.  More information clarifying operational/transportation procedure and exemption qualifications can be found in the attached document.
On April 3, the government announced that companies with goods stored at Port Klang and ports in Johor, Penang, Kuantan, Melaka, Bintulu, Sarawak, and Padang Besar bordering Thailand are advised to transport goods out of the listed ports between Saturday, April 4 and Tuesday, April 7.  The government is allowing this temporary transportation of non-essential goods to reduce port congestion and ensure effective delivery of essential supplies across the country, in line with the similar announcement issued for last weekend.  More information can be found in the attached document. 
In addition, Malaysians and all foreigners within Malaysia are now confined to a 10-km radius from their residence and may travel within that radius only to seek healthcare and purchase/deliver food, medicine, dietary supplements, or daily necessities.  When moving under these approved circumstances, individuals must not be accompanied by anyone else unless reasonably necessary.  Those approved to travel because of official duty or involvement with essential services are required to show an employer’s authorization letter should they be stopped by the authorities. 
All businesses approved as essential services can only be open between 8:00am and 8:00pm.  Businesses that sell food must operate via drive-through, take away, or delivery.  The government has also placed price ceilings on individual face masks at RM1.50, while Domestic Trade and Consumer Affairs Minister Datuk Alexander Nanta Linggi has capped the price of medical mask boxes at RM72.50 for wholesale and RM75 for retail.  Mass gatherings except for funerals (with minimal attendance) remain banned and citizens, permanent residents, and expatriates returning from overseas must still receive a health examination.  Any person or individual involved with a company, association, or organization that violates any of these provisions may face a fine of up to RM1,000 and/or six months of imprisonment. 
Regions that have particularly high rates of infection may face protocol even more stringent than the MCO’s second phase; in one area in Hulu Langat, Selangor and two areas in Kluang, Johor, the government has imposed an enhanced movement control order in which residents are banned from leaving their homes, all businesses must cease operations, and local authorities provide food.

Following the announcement of these stricter procedures, the Ministry of International Trade and Industry (MITI) announced its establishment of a special Cabinet committee of economic and security officials focused on balancing containment of COVID-19 via the MCO and bolstering the nation’s economy.  The Cabinet approved the committee’s formation during a meeting on April 1, with MITI Minister Datuk Seri Mohamed Azmin Ali and Minister of Defence Datuk Sri Ismail Sabri Yaakob serving as co-chairs.  MITI’s statement noted that the ministry will consult with SMEs, manufacturers, investors, and industry players to gain insight into economic and business priorities.  The committee will first convene on April 3 and again on April 5, after which it will report its recommendations to the Prime Minister during the April 6 Economic Action Council meeting.
The Malaysian Digital Economy Corporation (MDEC) has emphasized that companies in essential industries granted approvals to operate—should provide authorization documents to commuting employees that detail the company’s name and address, as well as the names, IC/passport numbers, position/job designations, contact information, work schedules, and necessity justifications of employees.  Firms should also provide supporting documents that include the list of essential services approved by the National Security Council and evidence of the company as included in that list.  Should an approved company’s employee be stopped from commuting even after providing these documents or an approved company in essential services be forced to cease operations by law enforcement despite compliance to Ministry of Health guidelines, employees and employers are encouraged to contact the 24-hour National Security Council Command Center Hotline at 03-88882010.
COVID-19 cases continue to spread even amid signs of potential infection slowdown.  On April 1, the daily number of new infections decreased to 142 following the previous week’s high of 235, but jumped back to 208 as of noon on April 2.  As of April 3, Malaysia had 3,33 confirmed cases, 53 deaths, and 827 recoveries.