Indonesia being the most populous Muslim country in the world, worries may arise for many foreign investors prior to investing in the country. Worry no more, as Paul Hype Page has the answers to all your queries.
Yes, being a Muslim country with the world largest Muslim population, the Indonesia government is pretty strict when it comes to the Halal regulation in Indonesia. In accordance to the Indonesian Regulation No. 33 of Year 2014, all food, beverages, drugs, cosmetics, chemicals, and organic products sold in Indonesia is required to have a Halal certification. The Indonesian government’s new Halal Product Assurance Agency (BPJPH) was established by the Indonesian government in October 2017 to take over the role of halal certifier from the country’s top clerical body Majlis Ulema Indonesia (MUI). The regulation covers guidelines including technical matters related to halal certification and the need for an Indonesian halal logo.
The Halal Law is of strong relevance to manufacturers of consumable goods, chemical products, medicines, cosmetics, and importers of these products. The halal certification is expected to be in operation by the end of this year (2019) which leaves companies in a short period of time to be in compliant to the Regulation (No. 33 of Year 2014) before the auditing and halal certifying agencies recognized by the Ministry of Religious Affairs are fully up and running.
Halal is an Arabic word means allowed or permitted by Islamic Law. The Law No 33 years of 2014 does not mention what halal is. It just explains halal in specific terms such as “halal product”, “halal label” and “halal certificate”. In relation to food, it must be:
- Does not stem from or consists any part or item from animals that are forbidden (pig, carrion, having claws, talons or fangs, etc.) to Muslims by Islamic Law.
- Food when prepared, processed, manufactured, packaged, stored or transported does not come in contact with or stored near any food that is forbidden and contain impurities as defined by Islamic Law.
- Animals that are allowed and been slaughtered according to Islamic Law, not killed by strangulation or killed by wild animals.
- Food, be it animal, vegetable, fruit or grain must be Tayyib (healthy) and does not contain any substance that is considered impure (alcohol) in Islamic Law.
- Food that is prepared, processed or manufactured using equipment or utensils that are free from impurities as defined by Islamic Law.
The two authority bodies for the halal certification in Indonesia are:
- The Food, Drug and Cosmetics Assessment Agency (LPPOM), and
- The MUI Fatwa Committee halal standard in Indonesia
The certifications are expected to cover ingredients and the equipment used to prepare and make the products. The Halal Product Protection Bill also lodged stiff penalties on offenders who did not comply with the bill ranging from a 2 year jail term with IDR 1 billion (USD 75,000.00) fine to a 8 year jail term and IDR 6 billion (USD 425,000.00) fine.
To obtain the Halal certification, producers would be required to go through a procedure to prove that the material used have met the halal requirement approved by LPPOM and MUI. Then and only will the products produced can be declared a certified halal product by Fatwa Committee.
The following steps are the procedure required to obtain a halal certificate:
Step 1 – Halal Certificate request is submitted by traders to BPJPH, then BPJPH will decide definitive schedule for examining requested product.
Step 2 – Halal Auditor will investigate halal substance when processing process of a product is being held. If the product is positively contaminated with non-halal substance, auditor will conducted laboratory examination.
Step 3 – The result of examination will be delivered to BPJPH. Furthermore, BPJPH will coordinate with MUI in order to determine whether that product halal or not by asking MUI to conduct Fatwa Hearing which will carry out up to 30 days
Step 4 – After MUI renders a decision, there will be 2 possibilities:
- If halal, Halal Certificate will be issued
- If not, the proposal will be rejected
Step 5 – Accepted Halal Certificate will be valid 4 years and must be renewed at least 3 months before expired day.
There are several benefits in which producers will receive in obtaining the halal certification in Indonesia. Examples of these benefits are as follows:
- Increase a restaurant’s revenue and enhance its marketability especially to Halal consumers.
- Widen the range of customers by attracting Muslim customers and non-Muslim who are Halal consumers.
- As a confirmation for Muslim customers that the food served is Halal and is in accordance with Islamic Law.
- Assure customers that the food served is Halal and healthy and the premise’s hygiene and sanitation procedures are in top-notch.
- If planning to export, the Halal certificate will help to assure Halal consumers in importing countries
Paul Hype Page & Co – OSS service provider and Asean Chartered Accountant.
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