COVID-19: Impact of Movement Control Order on Non-Governmental Organisations and Social Enterprises

 We are all in uncharted waters with no definitive end in sight. There is an increased demand for the services provided by NGOs and social enterprises by the most vulnerable members of society. It is therefore all the more crucial for NGOs and social enterprises to ensure continuity of their much-needed services.

As the COVID-19 situation continues in Asia and around the world, non-governmental organisations (NGOs) and social enterprises are being challenged to respond to difficult and unanticipated scenarios. Together with TrustLaw, Thomson Reuters Foundation's global pro bono legal programme, Lee Hishammuddin Allen & Gledhill[1], hosted a live webinar on contractual and employment issues arising from COVID-19 and the Malaysia’s Movement Control Order. Several NGOs and social enterprises have joined our discussion on legal and practical implications as well as structuring essential steps in weathering the impacts of COVID-19.

NGOs and Social Enterprises’ Contingency Planning in times of COVID-19

 As social distancing and isolation set in, almost all community and religious events came to an abrupt halt. This includes cancellation of not only major social events, but local activities planned by NGOs and social enterprises. The COVID-19 crisis forced the global community to reassess a new way of life – with what used to be normal behaviour now endangering the public.

Over the past two months, we have been working with several local NGOs on rescheduling and cancellation of events, following which we developed a mind map and checklist which may be helpful to other NGOs and social enterprises.

Key considerations for NGOs and Social Enterprises

• Legal and Regulatory Requirements: Smooth operation in the time of COVID-19 requires appreciation of and compliance with current laws, regulations and directives, including standard operating procedures issued by the National Security Council and Ministry of Health. Embracing new measures, particularly social distancing, is essential.
• NGO-Specific Issues: A number of NGOs & social enterprises provide crucial services e.g. support to victims of domestic violence, distribution of necessities such as food and clothing to the indigent. Due to the necessary restrictions on movement and prohibitions on mass gatherings during this COVID-19 period, NGOs and social enterprises who face significant operational issues should consult and obtain prior approval from the relevant government and health authorities to enable continuity of operation.
• Contractual Obligations: NGOs and social enterprises are advised to review their 2020 business plans and/or identify all current and planned activities for 2020 including any contractual arrangements. This will enable NGOs and social enterprises to reassess and plan ahead – whether this involves restructuring, postponing, or cancelling scheduled activities. It is also advisable to consider preparing a list of current and future expenditures as well as sources of funding – loans, donations, grants and investments to manage financial exposure.

• Funding: NGOs and social enterprises may be eligible for financial assistance scheme provided by government agencies and charitable trusts in response to the crisis. It is important to identify and maintain a constant flow of communications with these organizations.
• Insurance: Before making any decision on the way forward for a project or agreement, it is crucial to review the availability and coverage of the event cancellation insurance (ECI) policies. Moving forward, companies and individuals looking to purchase ECI insurance should carefully review the policies and ensure the policy covers their needs so as to manage prospective financial losses resulting from event cancellation. 

 Conclusion

We are all in uncharted waters with no definitive end in sight. There is an increased demand for the services provided by NGOs and social enterprises by the most vulnerable members of society. It is therefore all the more crucial for NGOs and social enterprises to ensure continuity of their much-needed services. A number of grant bodies and donors may seek to vary or even cancel previously agreed funding arrangement. Organizations are therefore advised to come together and engage in frank discussions with all stakeholders to overcome this situation.

[1]  Special thanks to Sebastian Tay who agreed to join us right from the outset and indeed conducted an interesting tutorial on Employment Law and of course Fatin Nursa’adah binti Azman, my co-presenter, who crafted the mind map and checklist!!!