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FLC requests parliament to amend HPA's guidelines for micro-businesses

Shahudha Mohamed
02 September 2020, MVT 11:36
A Parliament sitting in progress. PHOTO: PARLIAMENT.
Shahudha Mohamed
02 September 2020, MVT 11:36

Family Legal Clinic (FLC), on Tuesday, addressed a letter to the Speaker of Parliament regarding the Health Protection Agency (HPA)'s recent announcement, mandating all food vendors, including home-based micro-operations, to register at the authorities in order to continue services.

Noting the announcement does not list a set of guidelines that are feasible for micro-business owners to follow, FLC's letter requested the parliament to draft a new set of guidelines for micro-businesses and amend HPA's role, to regulate these vendors.

Describing HPA's announcement on August 31 as "unjust and nonsensical", the organisation providing free legal assistance to penalised groups also requested the parliament to hold HPA accountable over the matter.

HPA's announcement mandates micro-businesses to go through the lengthy process of completing paperwork and finalise their registration immediately.

Since authorities did not grant a transitional period for the changes, micro-businesses can be fined up to MVR 10,000 under Section 24 of the Business Registration Act, if they continue to offer services from September onwards.

FLC expressed grievances and concerns that HPA's decision disproportionately affects women and single-mothers who are selling home-made food and beverages in order to stay afloat amidst the financial recession, after suffering job loss, unpaid leave or pay cuts, due to the ongoing pandemic.

HPA had stated the implementation was mandated to address health and safety concerns, after receiving multiple complaints of unregistered food and beverage services conducting deliveries and advertising through online platforms.

In the letter, FLC agreed with this reasoning, noting that hygiene and safety guidelines must be followed by any persons providing food and beverage services, but stated that "those guidelines must be suitable for the group that is targeted by the guidelines".

FLC further noted that "designing policies that result in an immense hardship for people or further hinder the people's financial situation at a time like this is unacceptable".

The letter also referred to discrepancies in the law and HPA's decision.

According to Section 9 (a) of the Business Registration Act, selling products or providing services at home to sustain one's own livelihood without employing any additional individuals is exempt from registration.

Moreover, FLC noted that the health and safety guidelines listed by HPA are targeted towards commercial-scale outlets, which are difficult or impossible for home-based vendors to follow.

The organisation also stated that HPA had not granted a transitional period for micro-businesses, although the agency had failed to regulate such endeavours for health and safety concerns prior to their announcement.

HPA's decision was announced following a meeting with the Restaurant Association of Maldives (RAM), where restauranteurs lobbied for authorities to impose the same guidelines for restaurants on home-based businesses.

A viral screenshot from the Viber group of RAM where members celebrated HPA's decision and a restauranteur said that "RAM must push HPA in this tempo to eradicate unregistered online food vendors", resulted in public outrage.

Many accuse that HPA's decision was influenced by RAM, and imposing a difficult guideline with a strenuous registration process on micro-businesses was a deliberate move to "wipe out the competition", with the increasing popularity of home-based cooks and bakers.

As a country heavily reliant on the hospitality field for income, the restrictions on local and global travel and tourism as a result of the COVID-19 pandemic have severe repercussions on the Maldivian economy, with many losing their jobs and local companies struggling to stay afloat.

In mid-April, the World Bank estimated that Maldives will be the worst-hit country in the South Asian region, in the ensuing economic regression caused by the pandemic.

Ministry of Finance projected earlier that the state deficit would reach MVR 13 billion this year compared to the MVR 5.9 billion originally stated in the 2020 State Budget, as a result of economic repercussions caused by the COVID-19 pandemic. The ministry also projected that the total state debt sans guarantee would increase to MVR 70 billion, which accounts for 86.6 percent of Gross Domestic Product (GDP). An overall 115 percent drop is projected in the GDP, along with 81.3 percent for nominal GDP.

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