Indonesian Halal Certification Process Changes Following the Pass of the Omnibus Law

Terms:

BPJPH: Halal Product Assurance Organizing Agency, a governmental body formed under the Ministry of Religion

MUI: Halal Fatwa Issuing Organization, a government-funded organization that acts independently

LPH: Halal Audit Institution

Fatwa: A nonbinding legal opinion on the point of Islamic Law given by a qualified jurist in response to a question posed by a private individual, judge or government

Halal Fatwa: Issued by MUI, acting as the basis for BPJPH to issue the Halal Certificate

JPH: Halal Product Assurance

On Oct. 5, 2020, the Omnibus Law was approved by Indonesian House of Representatives (DPR) and signed by the President Jokowi on Nov. 2, 2020 ^[1]. With the amendments of 76 existing laws (including Halal Product Assurance Law), it is aimed at reducing bureaucracy and boosting investment in Indonesia. This article summarizes the halal certification process changes brought by the Omnibus Law.

Brief Introduction of HPA Law

Indonesian Halal Product Assurance Law (HPA Law) was released on Oct. 17, 2014, and came into force on Oct. 17, 2019. The Law stipulated that all halal products which are imported, distributed and traded in Indonesia or services related to cosmetics, foods, beverages, medicines, chemical products, biologic products and genetically modified products must be certified halal. Halal-certified products must label “Halal”, and those not certified halal need to label “non-halal” on the outer packaging.

The HPA Law will be phased in within seven years. Cosmetic business operators should progressively work towards obtaining the halal certification prior to Oct. 17, 2026 ^[2].

Revised Halal Certification Process

Detailed Amendments to HPA Law

The following are the key amendments to HPA Law. The changes have been marked in red.

Articles	The previous Halal Product Assurance Law 2014	The revised Halal Product Assurance Law 2020	Amendments
Article 13	LPH should have accreditation from BPJPH; In case an LPH is established by the public, LPH must be proposed by a legal Islamic religious institution.	BPJPH’s LPH accreditation is no longer required; In case an LPH is established by the public, LPH must be proposed by a. legal Islamic religious institution; or b. Private universities that are under the auspices of an incorporated Islamic religious institution or a legal Islamic foundation. *still subject to the Government Regulation to be released in the future.	/
Article 14	LPH must have a minimum of 3 halal auditors. Halal auditors must obtain certification from MUI.	MUI’s halal auditor certification is no longer required.	/
Article 29	No time limit for halal certification application confirmation.	BPJPH must confirm halal certification application within 1 working day after submission.	Set the time limits for documents confirmation. The confirmation does not mean that the certification is completed. It means the confirmation of the submitted documents’ completeness.
Article 30	BPJPH appoints an LPH to perform product halal status examination; Appointment of an LPH is performed within 5 working days after receiving halal certification application.	BPJPH may appoint an LPH to perform product halal status examination based on the application of the business operator; Appointment of LPH is performed within 1 working day after receiving the halal certification application.	Shorten the time limits for LPH appointment from 5 working days to 1 working day.
Article 31	No time limit for product halal status examination.	The halal auditor should check and examine the halal status of the product within 15 working days. LPH is allowed to submit a written proposal to BPJPH for extra examination time.	Set time limits for product halal status examination.
Article 32	LPH submits halal examination results to BPJPH; BPJPH submits these results to MUI to obtain a halal fatwa.	LPH submits halal examination results to MUI along with document copies sent to BPJPH; BPJPH reviews the examination results. If the results fail to meet BPJPH standards, BPJPH shall convey the consideration to MUI.	LPH submits the examination results directly to MUI instead of through BPJPH to shorten the certification process.
Article 33	MUI holds the Halal Fatwa Assembly to determine the product halal status within 30 working days after receiving the examination results from BPJPH.	MUI holds the Halal Fatwa Assembly to determine the product halal status within 3 working days after receiving the examination results from LPH.	Shorten the time limits for Halal Fatwa Issuance from 30 working days to 3 working days.
Article 35	BPJPH issues halal certificate within 7 working days after receiving the halal fatwa from MUI.	BPJPH issues halal certificate within 1 working day after receiving the halal fatwa from MUI.	Shorten the time limits for halal certificate Issuance from 7 working days to 1 working day.
Article 35 A	/	If the LPH fails to examine the product halal status within the time limit, the LPH will be evaluated and/or subject to administrative sanctions; If MUI fails to issue the halal fatwa within the time limit, BPJPH can directly issue a halal certificate.	/
Article 42	The halal certificate is valid for 4 years; Business operators must extend the halal certificate by applying for renewal no later than 3 months before the expiry date.	The halal certificate is valid for 4 years; Business operators must extend the halal certificate by applying for renewal no later than 3 months before the expiry date; If the business operator states a statement that it fulfills the halal production process requirements and does not change the ingredients, BPJPH can immediately renew the halal certificate.	Streamline the halal certificate renewal process.
Article 44	The halal certification fee is borne by business operators who apply for halal certificates; If micro and small business operators apply for halal certification, the fee can be facilitated by a third party.	The halal certification fee is borne by business operators who apply for halal certificates; If micro and small business operators apply for halal certification, there is no fee.	Exempt the halal certification fees for micro and small business
Article 53	The public can participate in organizing JPH; Public participation can be: a. conducting socialization about JPH; and b. supervising products and halal products in circulation.	The public can participate in organizing JPH; Public participation can be: a. conducting socialization and education about JPH; b. assistance in the halal product manufacturing process; c. publication that the product is in the process of mentoring; d. marketing in legal Islamic community networks; e. supervising halal products in circulation.	/

Source: KOTRA ^[3]

Significant Influences

1) Significantly reduce the time required for halal certification

The Omnibus Law set or reduced the time limit for each link of halal certification. The time required from application to certificate issuance has been shortened from more than 3 months to around 21 working days.

2) Reduce the burden on enterprises

The biggest challenge of halal certification for micro and small business is the high cost. The Omnibus Law exempts the halal certification fees for micro and small business.

Another notable point among the amendments is that BPJPH can renew the halal certificate directly if the ingredients are not changed. The enterprises do not need to undergo the halal review or examination for certificate renewal.

3) Clarify the responsibility division between BPJPH and MUI

Before the establishment of BPJPH, there was no government agency for halal certification in Indonesia. MUI served as the only halal certifier and has been controlling the entire halal certification process for over 2 decades.

Established in 2017 and officially started operating in 2019, BPJPH took over from MUI as the sole and national halal certification government agency in Indonesia. MUI need to cooperate with BPJPH, but the responsibility division between them was unclear.

The Omnibus Law partially resolves this ambiguity. MUI is authorized for the product halal status determination through a halal fatwa. BPJPH will coordinate with MUI about the product halal status determination.

The details regarding halal supervisors, LPH, halal auditors, the halal certificate renewal process, fees, public involvement and sanctions shall be further regulated in a Government Regulation that is to be issued ^[4]. To help enterprises better prepared for the mandatory cosmetics halal certification in the next few years, ChemLinked invited Ms. Dewi Rijah Sari, the expert consultant from dRs Consûlta to present an Indonesian halal certification webinar on Dec. 15, interpreting the halal regulation updates, the implications to cosmetic business, challenges and opportunities. Visit here for free registration.