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FMM PRESS STATEMENT: Amendment to the Prevention and Control of Infectious Diseases Act 1998 (Act 342) on Higher Penalties Too Punitive To Companies and Would Derail Economic Recovery Efforts

Kuala Lumpur, December 15, 2021 – Reference is made to the amendment to the Prevention and Control of Infectious Diseases Act 1998 (Act 342) which was tabled for the first reading at the Dewan Rakyat on December 14, 2021. The amendments include the proposal to increase penalties on companies under Section 24 - General Penalty where upon conviction fines of up to a maximum of RM2 million will be imposed compared to the maximum fine of RM100,000 introduced on March 11, 2021 under the Emergency (Prevention and Control of Infectious Diseases) (Amendment) Ordinance 2021 and Section 25 – Compounding of Offences where a compound of up to a maximum of RM1 million can be imposed as opposed to the maximum compound of RM50,000 for breaching Covid-19 Standard Operating Procedures (SOPs).

The Federation of Malaysian Manufacturers (FMM) fully agrees that it is everyone’s effort to play a role in breaking the Covid-19 chain by adhering to Covid-19 SOPs and enhancing the TRIIS (Test, Report, Isolate, Inform, and Seek) self-assessment. As has been practised since the start of the pandemic, companies in the manufacturing sector have been adhering to the Covid-19 SOPs and have undertaken added preventive measures such as the vaccination of all employees through the Program Imunisasi Industri COVID-19 Kerjasama Awam-Swasta (PIKAS) and adhering to the mandatory bi-weekly testing of all employees irrespective of the phases of the National Recovery Plan (NRP). At the same time, targeted testing is already in place for many companies as part of their business continuity plan based on their own risk assessment and management which is an effective approach to pick up positive cases and trigger the necessary COVID-19 protocols to curb the virus spread in the factory. Efforts are also underway to encourage employees to go for booster vaccine to strengthen Malaysia’s booster strategy and support public health outcomes.

While FMM notes that the proposed amendments to Act 342 seeks to strengthen the control of infectious diseases by more effective and efficient enforcement of the SOPs, FMM would like to share the following concerns from the manufacturing sector:

i) Yesterday, the Director General of Health, Tan Sri Dr Noor Hisham Abdullah, was reported in the Star newspaper to have said that "RM1,000 compound for a company that rakes in millions in profit is a paltry sum and will have no effect. That is why we are proposing to increase the compounds against companies." FMM wishes to remind the government that based on the latest data as of June 2021 in Malaysia Statistical Business Register released by Department of Statistics, Malaysia (DOSM), the total number of companies in Malaysia is 1,192,786 out of which only 32, 388 or 2.7% are large companies. The remaining 1,160,398 companies or 97.3% of the total number of establishments are MSMEs. As such, if it is the objective of the government to punish errant companies that “rake in millions in profit”, it should come out with a different and targeted approach instead of punishing the majority of companies in Malaysia which are MSMEs struggling to survive. The business fraternity is still reeling from the impact of the various lockdowns and most companies have yet to bring their businesses back to sustainable levels. With a maximum fine of RM1 million for compoundable offences or up to RM2 million for offenses to be prosecuted in courts, companies especially MSMEs may be forced to close down as they cannot afford to pay such hefty fines.

ii) Tan Sri Dr Noor Hisham Abdullah was also quoted in the same Star newspaper yesterday that “the move to increase the maximum fines is necessary as data has shown that most clusters and repeated offenders were from companies and manufacturing sectors [sic].” Again, FMM wishes to remind the government that it must be recognised that the manufacturing sector is one of the main sectors allowed to operate throughout all the phases of the NRP given its significance to the economy and global supply chains. Therefore, the manufacturing sector would also be one of the main sectors in terms of infection detected in workplaces but actually originating from the prevalent asymptomatic sporadic cases in the community. Please bear in mind that based on the previous statistics from Ministry of Health (MOH), the sporadic cases took up almost 70% of total positive cases which cannot be traced to any cluster whereas positive cases from cluster-based were about 30% only. Thus, it most certainly cannot be equated to factories being among the most repeat offenders. Such a conclusion is most unfair and inaccurate, especially when there are 2.24 million employees from the community working in the manufacturing sector as of October 2021 according to the latest data from DOSM.

iii) We note that the proposed amendments will include the delegation of power to allow enforcement to be carried out not only by officers from the MOH but also by local authorities. During the Full Movement Control Order period, manufacturers from the essential sector were subjected to numerous raids and almost daily visits by different enforcement agencies which were not only confusing with inconsistent interpretation of the SOPs but also highly disruptive to operations. The affected companies were not allowed to rectify any inconsistencies that arose from the visits but instead, were forced to close operations and imposed with punitive fines. As the manufacturing sector is the only sector currently required to conduct bi-weekly mandatory testing of its employees, FMM is greatly concerned that it will be targeted again by enforcement officers with inconsistent interpretation of the SOPs as the higher fines from the amendments to the Act 342 may create opportunities for abuse of power and corruption.

In this regard, FMM greatly appreciate further consideration on concerns raised by the industry on the proposal to increase the penalties under Section 24 and 25 of Act 342 and we welcome further engagement with the Ministry of Health to discuss recommendations for a win-win outcome for both the Government and private sector to combat the pandemic and at the same time, facilitate the continued recovery of our economy.

Tan Sri Dato’ Soh Thian Lai
President, Federation of Malaysian Manufacturers

FMM Advocates Transparency, Integrity and No Corruption

About FMM
The Federation of Malaysian Manufacturers (FMM) has been the voice of the Malaysian manufacturing sector since 1968. Representing over 10,000 member companies (3,000 direct and 7,000 indirect) from the manufacturing supply chain, FMM is actively engaged with government and its key agencies at Federal, State and local levels. FMM is also well-linked with international organisations, Malaysian businesses and civil society. Apart from benefitting from FMM’s advocacy, FMM members enjoy value-add services, including training, business networking and trade opportunities as well as regular information updates.

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