With Indonesia’s fast-growing Muslim population, halal industry has become a continuous ballooning market in the country. Therefore, the government of Indonesia has now issued Regulation 31/2019: Halal Product Guarantee Law. This new regulation replaces the various provisions previously set out under Regulation 33/2014.
GR 31 was established on 29 April 2019 but gained popularity after the hubbub of the presidential election and Lebaran Holiday. And now, with the growing demand in the Indonesian market amidst the China-US trade war, President Jokowi decided to strike while the iron is hot!
In Regulation 31/2019, further provisions are implemented with the following subjects included:
This article elaborates the most important provisions that every entrepreneur wishing to enter the halal market in Indonesia should know.
In Indonesia, it is mandatory for various products that are imported, distributed, and traded in the country’s territory to acquire halal certification. The scope and details of the products are written in the following:
Specifically, GR 31 stipulates that for the third point in the scope of goods or products, the regulation shall only pertain to food, beverage, medicine or cosmetic products in Indonesia. Meanwhile the usable consumer goods (last point) shall be implemented for goods that are made from animal or containing animal traces in household healthcare, household equipment, moslem praying implements and office utensils.
The process of the implementation of halal certification is carried out gradually, starting in 17 October 2019. First of all, food and beverage products are the first to go through the implementation, before the government will move on to other products.
It is also important to know that GR 31 implements a rather gradual approach for the industries based on the following priorities:
a) halal product obligation based on the applicable regulation
b) halal products prior to the applicability of Law of the Republic of Indonesia No. 33 Year 2014 concerning Halal Product Warranty
c) product based on primary needs and massive consumption category
d) product with high non halal critical point
e) readiness of business owners
f) Halal Product Warranty implementation infrastructure readiness
The implementation will not affect the existing halal certification requirements for animal products. This is because the animal product halal certification is under its own regulations and laws.
In order to be granted the halal certification, products produced should only use halal raw materials and process methods. Any products that use non-halal material, equipment or process are not eligible for the halal certification and non-halal information should be included with the mentioned products.
Related article: Most Common Questions about Halal Certificate
The places, locations, and equipment utilised to produce the halal products must be strictly separated from any places, locations and equipment associated with the production of non-halal goods.
Furthermore, the places, locations and equipment used for halal product process must be hygienic and clean at all times and they should also be free from non-halal materials and impurities.
The following aspects to separate places, locations and equipment of halal products process from non-halal ones must be followed in order to obtain the halal certification:
Foreign halal products that have acquired halal certificates through certification institutions acknowledged by the Halal Product Guarantee Agency BPJPH (Badan Penyelenggara Jaminan Produk Halal) will not need to further obtain another halal certification in Indonesia.
However, these foreign-certified halal products must still be registered with BPJPH and are obliged to comply to all halal rules and regulations in Indonesia.
In short, the registration process of foreign certified halal products is as follows:
In face of this new regulation, we should step back and view that GR 31 does not provide sanctions for companies that have not applied or have yet to apply for halal certification.
However, we can see that based on Law No. 33 Year 2014 article 56 concerning Halal Product Warranty, halal certificate owners who fail to maintain their halal standards are subject to imprisonment for a maximum of 5 (five) years or subject to paying fines of up to a maximum IDR2,000,000,000 (two billion Rupiahs).
It is clear that the government is taking a rather motivational move for new industries to cater to the national Moslem community while maintaining strict sanctions for current halal certificate holders in order to present accountability before the international community.
Cekindo views GR 31 as a jumpstart effort to boost halal product presence in Indonesia by further clarifying the category of goods and services, and defining the role of BPJPH with MUI as the authority for Islam in Indonesia.
The impact is that goods and services that have yet to apply for halal certification will undoubtedly suffer from diminished local consumer interest, as compared to their competitors who have applied for halal certification. This is due to the simple notion that the goods and services without Halal certification shall be considered as Haram or unfit for consumption due to pork ingredients.
Our advice for clients would be to secure your halal certification before the deadline. Otherwise, the process might be lengthy and more costly in the future.
Cekindo has assisted multiple clients to apply for halal certification in Indonesia, which creates a positive image and boosts market sales. Many of our successful clients are proud to display their halal certificates to attract potential customers. This moderate investment goes a long way since the halal certificate is valid for 2 (two) years and renewable upon application.
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