Q1: What is Movement Control Order (“MCO”)?

  1. Movement Control Order or MCO has been implemented by the Government of Malaysia and being enforced pursuant to the Prevention and Control of Infectious Diseases Act 1988 (“PCIDA”)  and  the  Police  Act  1967  as  one  of  the  measures  to  curb the spread of  coronavirus  pandemic  (Covid-19).  The  MCO restricts the movement of anyone to, from  and  within  the country.[1]
  2. There are three phases of MCO in Malaysia, namely phase 1 which is from 18th March 2020 to 31st March 2020, phase 2 which is from 1st April 2020 to 14th April 2020 and  phase 3 which is from 15th April 2020 to 28th April 2020.
  3. Regulation 7(1) of the Prevention and Control of Infectious Diseases (Measures Within The Infected Local Areas) Regulations 2020   (“PCID   Regulations”)   provides   that   if   any   person   who contravenes any provision of the regulations commits an offence and shall, on conviction, be liable to a fine not  exceeding RM1,000 or to imprisonment for a term not exceeding 6 months,  or to both.[2]

Q2: When does the MCO take effect?

The MCO took effect from 18th March 2020 to 31st March 2020 (“MCO phase 1”).[2] On 25th March 2020, the Prime Minister announced that the MCO was to be extended to 14th April 2020 (“MCO phase 2”).[3] On 10th April 2020, the Prime Minister announced that the MCO shall be extended to 28th April 2020 (“MCO phase 3”).[4]

Q3: What is the effect of the MCO phase 1 and phase 2? 

Save and except for “essential service”, all public and private premises are ordered to be closed during the MCO period.

Q4: If only the essential services are allowed to operate during MCO, does “essential services” include construction and maintenance industry?

Pursuant to Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations 2020 (“PCID Regulations”), gazetted on 18th March 2020 which stipulated the relevant sectors which are regarded as “essential services”, it appears that “essential services” do not include construction industry and maintenance industry.[6]

Q5: As construction and maintenance industry are not classified as essential services, are there any circumstances which allow such works to be proceeded during MCO?

The Ministry of Work (Kementerian Kerja Raya) has issued Frequently Asked Questions (FAQs) on 18.3.2020 for the Movement Control Order which confirmed that all construction and maintenance works are prohibited during the MCO period, except for “critical works”.[7]

Q6: What tantamount to “critical works” , which allowed to be proceeded during MCO?

  1. The KKR’s FAQs dated 18.3.2020 defined “critical works” as those works which if they are not continued with, could cause harm and danger to workers, the public, or the environment. 
  2. Besides that, the KKR’s FAQs dated 18.3.2020 has provided the example of what amounted to critical works as follows: – 
    1. Slope Repairs; 
    2. Pothole Repairs; 
    3. Traffic Management Control (TMC); 
    4. Periodical checks of lifts/travellators/escalators and other critical mechanical and electrical equipment; 
    5. Repairs of lifts/travellators/escalators and other critical mechanical and electrical equipment;
    6. Maintenance works at premises of critical services; 
    7. Upgrading works at premises of critical services; 
    8. Traffic Light Repairs;
    9. Construction of Bailey Bridge at location of any collapsed bridge; 
    10. Tunneling Works; 
    11. Other emergency works as specified under the contract; 
    12. Other works which if not completed would result in danger. [8]

Q7: Following the announcement of MCO phase 3 (i.e. 15th April 2020 to 28th April 2020) by the Prime Minister, what are the selected sectors allowed to resume business?

The Ministry of International Trade and Industry (‘MITI’) has on 10th April 2020 issued a list of the sectors of the economy that will be allowed to operate during the MCO Phase 3 period, inter alia, are as follows: 

  1. Automotive industry (limited to exports of Completely Built Up (CBU) units, parts and components, as well as after-sale services, for example repair and maintenance); 
  2. Machinery and equipment industry; 
  3. Aerospace industry; 
  4. Selected construction projects and services related to construction works

Q8: Are construction works allowed during MCO phase 3?

Yes, but only certain construction projects and services related to construction works as listed by MITI (refer to Question No. 7 above) are allowed and prior approval by MITI is required as stated in the Media Statement issued by MITI as follows[9]:- 

  1. Projects whereby the main contractors are G1–G2; 
  2. Projects that have achieved physical progress of 90% and above;
  3. Tunneling works;
  4. Maintenance works;
  5. Sloping works;
  6. Emergency works that are consequent to contractual obligations;
  7. Maintenance, cleaning and drying of stagnant water, spraying of pesticides at construction sites which prevent the breeding of Aedes mosquitoes and other pests;
  8. Other works that if left incomplete may result in danger;
  9. Building projects with 70 IBS score and above;
  10. Construction projects with accommodation facilities for workers, such as centralised quarters for workers or workers’ camp;
  11. Professional services related to the construction industry including architects, engineers, town-planners, land surveyors, quantity surveyors, project managers, facility managers as well as other relevant services;

Q9: How to apply to proceed with construction works during MCO phase 3?

Companies in the additional sectors listed may submit their application to MITI beginning Monday, 13th April 2020, from 9.00 am. All applications must be made online at MITI via www.miti.gov.my. It is important to note that only applications that are complete and fulfil the conditions will be processed.

Q10: What are the conditions imposed on the operation of construction works during MCO phase 3?

  1. Companies in the sectors that are allowed to operate MUST COMPLY with the requirements of the Standard Operating Procedure (SOP). In addition to adhering to these enhanced terms and guidelines, operating permits are also subject to compliance with the requirements set by MOH and guidelines by other relevant enforcement agencies from time to time.[10] 
  2. The conditions companies with approval to operate must adhere to during the MCO period are set out by MITI as follows: – 
    1. Companies have to reduce the size of workforce by 50% from the actual number.
    2. Companies must execute screening of body temperature for all staff at the entrance of factories/ premise. 
    3. Should the temperature of any staff recorded to be high, the companies must immediately inform the nearest public health clinic or hospitals. 
    4. All staff must adhere to the procedure set in place by the Ministry of Health to curb the spread of COVID-19. 
    5. Companies must make hand sanitiser and face mask avail to all staff at work. 
    6. Companies have to perform sanitisation process at their factories and premises. 
    7. Sanitisation process at factories/ premises has to be done three (3) times daily.
    8. Companies must ensure the vehicles used to transport their staff are sanitized.
    9. Companies must ensure the right SOP on social distancing is in place and its procedure to be executed effectively. 
    10. Should there be any staff infected with COVID-19, the companies are responsible to cover the cost of medical care, medicine as well as other relevant cost for the staff.[11] 
  3. It shall be noted that for construction industry, there are additional requirements set out by the Ministry of Works (KKR) and Construction Industry Development Board (CIDB) which stated that: 
  4. The company has to reduce the number of workers to a minimum or not more than 50% from the actual number needed; 
  5. The company has to give full cooperation to the Ministry of Health (KKM) in performing contact tracing of workers that has been infected with COVID-19; 
  6. Companies have to provide transportation for the workers and in the meantime practice the social/ safe distancing and the vehicles used for the transportation need to be disinfected before/ after use; 
  7. Companies shall provide insights and guideline to handle COVID-19 to their value chain; If the company provides the Centralised Labour Quarter (CLQ) facility for the workers, the company needs to ensure that it complies with the Garis Panduan CLQ and Penginapan Pekerja Binaan Semasa PKP issued by CIDB as well as any related agency.[12]

Q11: If your company is undertaking several construction projects or construction related services, do you have to apply for each of those projects?

Yes. Your company is required to apply individually for each project.[13]

Q12: Do contractors who undertake works to complete building construction, premises renovation, machine installation need to apply for approval?

Yes. Application must be made by individual companies via CIMS 2.0 at https://application.miti.gov.my[14]

Q13: Do subcontractors have to apply for MITI’s approval after the main contractor received its approval?

Yes. Sub-contractors are also required to apply for MITI’s approval after the main contractor has received its approval. [15] Applications must be made by individual companies via CIMS 2.0 at https://application.miti.gov.my]

Q14: What are considered as “construction related services”? 

Construction related services refer to services within the supply chain of a specific construction project. Companies within this supply chain are required to apply for MITI’s approval in order to operate.[16]

Q15: What happen if you failed to comply with the SOP and the relevant requirements/ guidelines? 

It will result in the immediate revocation of the operating approval and legal action will be taken under the relevant laws. [17]

This FAQs are prepared and published by Messrs Gan & Zul, Advocates & Solicitors, Kuala Lumpur.
-Construction & Alternative Dispute Resolution Division-
Prepared by :
Gan_Zul_Mr_Ben_Lee_Partner

Ben Lee Kam Foo (Partner)
Head of Dispute Resolution
Arbitrator & Adjudicator
Fellow of ADR, AIAC
Cross Border Taxation Planning

Phang Ting Hong (Associate)
Construction Dispute Resolution Division
Arbitration
Adjudication
Mediation

Joyce Gan Ling Ying (Associate)
Construction Dispute Resolution Division
Arbitration
Adjudication
Mediation

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Gan & Zul is an established legal firm in Malaysia which consists of experienced litigation lawyers. Our firm provides a wide spectrum of legal services covering various aspects of laws includes dispute resolution, debt recovery, land, bankruptcy, insolvency and corporate dispute. We are also a firm construction lawyers based in Kuala Lumpur.
If you have any queries or require additional information, kindly email us at kul.litigation@ganzul.com or call us at 03-2242 3836

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