Minister of Manpower Issues Guidelines for Business Continuity Plans

In light of the COVID-19 pandemic, on September 18, 2020, the Minister of Manpower (the “MOM”) issued her Decree No. 312 of 2020 on the Guidelines for the Drafting of Business Continuity Plans (the “BCP”) in Facing a Disease Pandemic (the “MOM Decree”). The MOM Decree is intended to provide guidance for companies to prepare their BCPs to protect their business continuation from the impact of the pandemic and to prevent the spread of the virus in their companies. Companies are expected to prepare the BCP tailored to their specific businesses.

As the MOM Decree is a guidance, there is no sanction if a company does not have a BCP. There is no obligation for companies to submit their BCPs to any governmental authority. However, companies are encouraged to involve the labor unions and coordinate with the Labor Inspector (Pengawas Ketenagakerjaan) in preparing the BCP.

Under the MOM Decree, there are seven stages in preparing a BCP, i.e.:

  1. recognizing business priorities;
  2. identifying the pandemic risks;
  3. planning the mitigation for the pandemic risks;
  4. identifying the response to the impact of the pandemic;
  5. designing and implementing the BCP;
  6. communicating the BCP; and
  7. testing the BCP.

We will briefly discuss the BCP preparation stages below.

  • Recognizing Business Priorities

In recognizing its business priority, a company shall first determine its main products/services. The company shall then identify the core business activities that must be conducted to produce such main products or to provide the main services. This step includes identifying the manpower required for the business activities and, in case of their absence, whether they can be replaced or filled in by other employees.

  • Identifying Pandemic Risks

Following the first step, the company shall identify the risks of the pandemic for the identified components. The company shall map scenarios of possible threats, both internal and external, that may disrupt the business continuity. These identified threats shall be scored based on their probability and severity (e.g., from scale of 1 to 5).

The company shall also map vulnerability points in each identified scenario, for example, vulnerability in manpower, material, facility, and finance. Subsequently, the company shall analyze its capability in controlling each threat, according to their level of priority.

  • Planning Mitigation for Pandemic Risks

In preparing the mitigation plan for the pandemic, a company shall consider preparing standard operational procedures (the “SOP”), implementing flexible work, securing the supply chain, preparing a communication team, reassess labor policy (such as policy on business travel, overtime, etc.), and occupational health and safety.

In planning the mitigation, the company shall determine the level of an acceptable risk for each threat, planning the actions required to mitigate such risk, set out a schedule for the action plan, determine resources needed to carry out the actions, and appoint the relevant personnel for each action.

  • Identifying the Response to Impact of Pandemic

The company shall first identify the events that will trigger the response, the target response, the responding action based on the mitigation plan and the SOP, the required resources, and the person in charge.

  • Preparing and Implementing BCPs

Based on the information identified at the previous stages, the company shall prepare the BCP in a matrix. A designated team may be formed specifically for the preparation of the BCP. It is also suggested that employees be involved in the preparation of the BCP and that the BCP sets out clear definition of the management’s and the employees’ responsibilities.

  • Communicating BCPs

After the BCP is stipulated, it shall be communicated internally (to all employees and management) and externally (to customers, suppliers, etc.).

  • Testing BCPs

The BCP may be tested in the form of simulation, drills, etc. The testing may be done periodically to keep the BCP updated on new issues that may occur from time to time.

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September 24, 2020

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