What You Need to Know about Compulsory Halal Certification in Indonesia

Effective from October 11, 2017, the Religious Affairs Ministry (MORA) has founded the Halal Products Certification Agency or Halal Product Assurance Implementing Board (BPJPH) as the sole halal certification body – three years after Law 33/2014 was issued. This agency was established to coordinate the Indonesian Ulema Council (MUI). Prior to 2014, halal certification was regulated on a voluntary basis.

The reason for the change from MUI to BPJPH was simple. With the inaugurated of BPJPH, it allows great transparency and higher accountability, at the same time, the capacities of certification bodies have increased tremendously.

What are the Changes and How Does It Affect Stakeholders?

Even though BPJPH has been established, it isn’t 100% ready to start its operation in dealing with halal certification application. The agency will only commence its operation by the end of specified deadline mentioned (i.e. October 17, 2019). Thus, for the time being, the certification of halal is managed by MUI and still based on the previous certification procedure. 

• Existing Process

The existing process of halal certification is valid from now until October 17, 2019, through MUI and The Assessment Institute for Foods, Drugs, and Cosmetics of the Indonesian Council of Ulama (otherwise known as LPPOM-MUI).

With one year left before the effectiveness of 2019 Halal Law, only one regulation of implementation has been completed by the government in Indonesia—out of 19 other regulations of Halal Law. The implementing regulations are crucial as they clarify how Halal Certification Requirement will be applied in practice.

Overview

Things changed in 2014 when the Government of Indonesia issued Law 33/2014 on Halal Product Assurance, also known as the Halal Law. Under the Halal Law, it is mandatory for all Halal products (traded, distributed, and imported) within the Indonesian land to be certified halal. This requirement is set to come into effect five years after enactment of the Halal Law, which will be on October 17, 2019.

A lot of queries have been raised by businesses and industry on the implementation of this law and how it will change the process of halal certification in Indonesia. Thus, the following content in this article will provide you with some insights on what you, as business owners, can expect from the implementation of the new law.

Why the Change?

1. New Process

The new process will start from October 17, 2019 onwards, until then MUI will remain the authority for the halal certification process, acting through the MUI certifying Halal Inspection Agency (LPH)—for fatwa or halal recommendation.

Under the new process, the bodies involved in halal certification are BPJPH, MUI and LPH. Despite this piece of information, there is still no step-by-step process and it is not known how these authorities will interact with each other throughout the certification process.

2. Labelling (New Logo)

Indonesia' s new halal logo was released at the end of 2017 by BPJPH. For products that have already had the previous logo, businesses can still use the previous logo until product expiration. Besides, there is no restriction on using a new logo sticker affixed over the previous logo on the packaging or label. As a result, no recall of products is necessary.

However, labelling of drugs, foods, and cosmetics is controlled by BPOM (Badan Pengawas Obat dan Makanan). New logo sticker for foods, drugs, and cosmetics is only allowed to cover the previous logo under special condition granted and approved by BPOM. 

3. Materials of Non-Halal

Article 26 of Halal Law states that non-halal materials must be declared on the labelling. However, this law does not specify whether non-halal materials, such as pork and alcohol, have been included in the materials list; or a separate written warning/declaration statement is required to be made.

4. Contact (Indirect) with Non-Halal Materials

Article 24 and Article 25 of the Halal Law mention that businesses with halal certification must divide the areas for production, storage, packaging, and distribution between non-halal and halal products.  For example, a halal product is deemed to be non-halal if it is stored using non-halal packaging.

5. Foreign Halal Certificate

Article 47 of the Halal Law shows that products and materials imported from overseas with a foreign halal certificate will only have to go through the registration at BPJPH. The products then can be sold and distributed in Indonesia.

There is, however, a list of foreign halal certification bodies that are permitted for this convenient process. BPJPH will have to assess the overseas certification institutions that are not on the list. Foreign investors should also keep in mind that the foreign halal certificate is only valid for ingredients and not finished products.

6. Process Timeline

No conclusive information is given on the duration of the new halal certification process. It is only known that after MUI has received the audit result, the halal edict will be issued within 30 working days. Subsequently, a halal certificate will be given by BPJPH within seven days. BPJPH, however, wants to have the entire process completed in less than 60 working days.

Latest Updates and Trends

The Halal Law that is going to be implemented in 18 months will not only cover foods and beverages, drugs, traditional drugs, and cosmetics but also medical devices. New halal regulations will be firstly implemented on foods and beverages, drugs, traditional drugs and cosmetics. Medical devices will be last due to a recent appeal for consideration by the Medical Device Trader Association.

This is because Muslims are forbidden from using alcohol, both topically or injection, even for medical purposes. Thus, the medical device industry fears that they will most likely lose business in this huge market of 240 million Muslims.

The direction of the Halal Law has been slow but is becoming clearer, with a more progressive involvement of Ministry of Law and Human Rights and several other authorities in Indonesia. Even though the Halal Law will be an absolute reality in 2019, it might not favor all stakeholders and business communities.

Parting Advice

With the appeals submitted to the governance for further consideration, it is advisable that businesses involved in halal products be ready and keep yourself updated on the implementation of the Halal Law in 2019. Businesses that fail to comply with the halal regulations will be subject to weighty sanctions.