State govts may face legal action if they stop businesses from reopening: MITI

The Senior Minister of International Trade and Industry said the government views seriously the position taken by the various state governments in refusing to execute the decision to restart the economy.

"Their actions are not founded on lawful authority and are contrary to the policy of the federal government, all the more so in view of the fact that the federal government’s policy has already been made into law and enforceable throughout the country," he said in a statement today.

Effective today, companies from almost all sectors of the economy are allowed to operate following the government's decision on April 29, 2020.

Mohamed Azmin said the decision to reopen the economic sectors under the terms of the Conditional Movement Control Order (CMCO) was taken with utmost care, caution and responsibility supported by data and findings by the Ministry of Finance, Ministry of International Trade and Industry (MITI), Bank Negara Malaysia and Khazanah Nasional Bhd.

He said the findings were presented for discussion with the Mentris Besar and Chief Ministers at the meeting of the National Security Council on April 28, whereby the state governments realised that should the MCO continue until June 2020, the cumulative loss of national income is estimated to reach RM146 billion or a shortfall of 10.3 per cent of the gross domestic product, which would wipe out the economic success that has been achieved over the last four years.

"In this regard, the meeting agreed to reopen the economic sectors during the CMCO beginning today. The federal government will provide a set of comprehensive and stringent Standard Operating Procedures (SOPs) for use by all parties and these SOPs have been provided to the state governments to be applied by all parties.

"For purposes of clarification, the SOPs had already been given to all state governments on May 2, 2020, that is, before the date of the enforcement of the CMCO," he added.

The government, he said, has implemented the MCO in accordance with the provisions of the Prevention and Control of Infectious Diseases Act 1988 [Act 342] to ensure the effective control of the spread of the COVID-19 pandemic.

He said the implementation of the MCO involves the entire country, including the states in Peninsular Malaysia as well as the Federal Territories, Sarawak and Sabah, while the regulations made under Act 342 are specific laws for the purpose of preventing and controlling the spread of COVID-19.

"As such, it prevails over the provisions of other written laws in respect of the prevention and control of infectious diseases.

"It should be stressed that the federal government’s decision is valid according to law. Act 342 was legislated and made enforceable effective April 1, 1989 following the agreement by all states then, including Sabah and Sarawak, to bring about a uniformed law for the purpose of preventing and controlling infectious diseases in Malaysia and enforceable throughout the country," he added.

Mohamed Azmin said the government has conducted various engagement sessions with the stakeholders of the economic sectors, particularly industry associations, local and international chambers of commerce as well as small and medium enterprises, in order to gauge the impact on business sustainability, supply chain and employment.

"Therefore, the government's decision to allow almost all sectors of the economy to operate in order to revive and revitalise the economy is expected to have a positive impact on the economic growth and financial position of the country, not only for the federal government but also for the states.

"Hence, the state governments are urged to co-operate in executing the federal government’s decision to regenerate the economy," he said.