The change that had long been expected finally came into effect. The Indonesian Council of Ulama (MUI) had delegated its authority to issue the halal certification to a newly established institution. The inauguration of the body of Halal Product Assurance Organizing Agency (BPJPH) happened on October 11th, 2017. It’s been three years after the law 33/2014 had been issued and its role had been mandated. How will it change the process of Indonesia halal certification? What can customers expect with this transfer of authority?
Before the government authorized the law no. 33 of 2014, only the Indonesia Council of Ulama (MUI) had the power to administrate a halal certificate. However, MUI was not well enough to manage the Indonesia halal certification.
The newly inaugurated body of the BPJPH is expected to improve transparency and accountability of the procedure as well as to prevent illegal practices including bribery. The procedure should be more straightforward—thanks to its integration through an online system with payments made through appointed banks.
Even though BPJPH holds the highest authority, the body is still not ready for an operation. This new process will start from October 17, 2019 onwards.
However, investors willing to certify their product must pay a closer look at the evolution of the power split of the institutions and changes that go hand in hand with it. There is no doubt that the halal certificate has become a factor that has a significant influence on a successful market entry in Indonesia, a country with a conservative Muslim majority.
The law no. 33 in 2014 that regulated procedures and applications for halal certification brought changes about halal labelling as well. Gradually imposed on every product related to food, beverages, and cosmetics, pharmaceutical, chemical, biological, genetic modified and utility goods, therefore all of these products distributed in Indonesia must be halal certified or labelled as non-halal.
Although a clear deadline was set—October 2019—it is not sure whether the ambitious plan can be implemented. According to the Indonesian Food and Beverage Association, over the next 24 months, all company should certify their new products with the current frequency, tens of thousands of new products to be exact. The body will issue around 7,000 halal certificates annually.
However, it is advisable to get your products certified as soon as possible, products with halal certification will have a remarkable advantage on the Indonesian market.
Nowadays, Indonesia halal certification process involves two parties: the MUI and the Indonesia National Agency of Food and Drug Control (BPOM). Furthermore, MUI has established a special body protecting Muslim consumers from consuming particular products. For instance, foods, drugs and cosmetics, the Assessment Institute for Food, Drug and Cosmetics (LPPOM-MUI).
Due to the Law No. 33/2014, the role of MUI will remain critical in the Indonesia halal certification process. Even though BPJPH will primarily function as a regulator with its right to issue, revoke, and manage all administration related to halal certification of domestic and imported products, there should be a halal recommendation or fatwa from MUI certifying Halal Inspection Agency (LPH).
Currently, the only existing LPH is MUI. A number of parties will become LPH in the future. Any government institution and communities with equal opportunities have the right to establish LPH in assisting BPJPH so long as it meets the following requirements:
In case all documents are in accordance with the requirements, then the whole process will take less than 60 days. The halal certificates issued under the BPJPH will be valid for four years unless the products change their composition, as opposed to the current regulation that stipulates two years.