Review hefty increase in fines – SME Sabah
KOTA KINABALU: The president of Small and Medium Enterprises Association of Sabah (SME Sabah), NK Foo has urged the government to review the revised hefty fine in the new Emergency (Prevention and Control of Infectious Diseases) (Amendment) Ordinance 2021 published on the Federal Gazette website.
This law will take effect on March 11 providing a maximum fine of RM10,000 for individuals and RM50,000 for companies who violate the standard operating procedures (SOPs.)
Foo said the 10 times increase in the fines for individuals to RM10,000 and a RM50,000 fine for companies, although is a maximum limit, is too harsh and beyond the people’s and SMEs’ ability to bear.
He said this would further stress SMEs and individuals who are still reeling from the massive negative impact from the pandemic on their financial status and health.
“We do understand the reason for fining offenders, but we see no reason to set such a hefty increase in fines.
“It can only give the impression that the welfare of the people and SMEs is not factored in while preparing the amendment to the ordinance as stated above,” he stressed.
Foo said during these very difficult economic times and prolonged effects of the pandemic on the world and local economies with no certainty of when the pandemic is going to be well controlled, many livelihoods have been devastated.
“The manner and timing of the implementation of the increase in the fines is not appropriate and ill-timed. It will cause more harm than good.”
Besides, he pointed out that Malaysia’s recent daily active cases have been declining, showing that the fine of RM1,000 is actually effective after the enforcement has been stepped up.
“Those SMEs that are still operating are making losses and not profits.
“Soon they will have to face the challenge and risk of being penalized RM50,000 if they are caught for violating the SOPs, which are changed frequently and too many to follow strictly.”
Nonetheless, Foo said a fine of RM50,000 is definitely too hefty for SMEs and unfair because the non-compliance of the SOPs can be due to many factors.
For example, if a company has many employees, then it will be almost impossible to ensure that each and every employee will not be negligent, albeit unintentionally, and will not forget to comply with the SOPs. Any such lapses by any employee(s), the employer is fined heftily.
“This risk is big, unmanageable and real. It adds to the losses of SMEs when they are fined, and this may be the ‘last straw that brakes the camel’s back’ for SMEs to decide to close their business first and wait for a better time to re-open.
“This move runs counter to the government’s desire to revive the country’s economy. Is that wise when government is actively working to revive the economy?”
Foo said enhancing the fines for stubborn violators of SOPs and repeat violators is a right direction but the way the penalties are to be meted out lacks clarity and the fines are too much for SMEs and the individuals to bear.
He added that the authority should have discussed with nongovernmental organizations (NGOs) before they come out with the new amendments to the ordinance.
He appealed to the authorities to immediately hold online meetings with NGOs to listen to SMEs and public feedbacks and stop working behind closed doors that resulted in these hefty fines in the amendments to the ordinance that are out of touch with society.
Foo also suggested that it is better to have detailed descriptions of the multiple categories of fine amounts to match the severeness of the offence.
“For instance, the authority should maintain a fine of RM1,000 for the first time offenders, RM2,000 for the second offense, and a third offense of RM3,000, and so on, but not more than RM5,000 for any offence.
“Instead of proposing more than RM5,000, may be other forms of punishment should be imposed instead to be effective,” he said.