Effective from October 2019, the government of Indonesia will enforce the mandatory halal certification and labelling measures for halal products in the country. Thus, Cekindo urges businesses and entrepreneurs to act appropriately and as soon as possible to avoid any unnecessary penalties.
With over 260 million population and 90% of them are Muslims, Indonesia remains the largest Muslim country in the world — making it among one of the biggest markets for Halal products and services. Along with the boom in non-food and beverage brands, introducing halal certification is definitely a sure-fire strategy to win the hearts of the huge Muslim market in Indonesia.
Currently, the total value of halal imports to Indonesia amounts to US$163 billion, showing that there is ample room for investors and manufacturers to penetrate the market.
However, Indonesia is enacting the halal certification and labelling as mandatory for halal products under the Halal Law. Products subject to this law include goods and services related to food, beverages, pharmaceuticals, cosmetics, chemicals, biological products, and genetically-modified products.
This law will be officially implemented in October 2019.
So is it too late to secure halal certification in Indonesia now? Not exactly — as long as you keep on reading this guide and know what you need to do to proceed with the application immediately.
Literally, “halal” is an Arabic term that means “lawful or permissible”, not only does it encompass food and drink but everything in our daily life.
While the explanation of halal could be a little more complicated, the basic concept of halal is as such: food, drugs, cosmetics and other products that do not contain any ingredients that are considered ‘haram’.
“Halal” must be traced back to the source of Muslim food or touch, from raw materials to product handling, including factory facilities, manufacturing machinery, packaging, storage, logistics, and even the retail stores.
Haram is the opposite of halal, and it means “forbidden or proscribed” by Islamic law. Everything that contains pork, animal blood, alcohol, dead animals and poisonous animals is deemed haram. Other than that, slaughtering animals without following the Islamic Law is considered haram as well.
A halal certificate is a document to justify that halal product sold to and used by the Muslim population are in compliance with Islamic Sharia laws. For businesses, halal certification is the only way to label their products as halal.
Related article: Most Common Questions about Halal Certificate
As mentioned above, the National Body of Halal Assurance (BPJPH) will be the highest authority to issue halal certificates to businesses, starting from October 2019. Besides, MUI, as one of the highest authorities on Islamic affairs in Indonesia, will be in charge of issuing the Halal fatwa and setting up the halal compliance standard.
There are two major authorities under MUI — The Food, Drug and Cosmetics Assessment Agency (LPPOM), and MUI Fatwa Committee. Both of them are in charge of the halal audit, assessment and declaration.
Although BPJPH is responsible for halal certificates issuance, the process of verifying if a product is halal will be done by the Halal Inspection Institution or Lembaga Pemeriksa Halal (LPH) in Indonesian. LPH will inspect and check if the production process, raw materials and storage are halal – both inside and outside the manufacturing facilities.
LPH is usually set up by the government but may be established by public institutions such as universities as well.
To perform the verification operation, LPH must first be accredited by BPJPH. Then, the approved LPH needs to employ a minimum of 3 inspectors, is equipped with its own laboratory. If the LPH does not have its own laboratory, it can cooperate with another party with a laboratory.
It is important for businesses to know that all non-registered halal products will be deemed as non-halal this year (2019) with the enactment of the new halal law.
Noticeably, to certify your halal products in Indonesia makes a lot of sense. Halal labelling on products seems to be a lot more appealing to Muslims who try to avoid any possibility of consuming or getting into touch with haram products.
While the process of halal certification in Indonesia might seem tedious and burdensome due to the paperwork to comply with the requirements, the procedure could be a simple one with Cekindo’s registration assistance:
The entire process will take approximately 60 days. The validity of halal certificates under BPJPH is four years. The validity may not apply if a product’s composition has been modified.
Even though it might not be late to secure your halal registration in Indonesia, be aware that there are thousands of products that have not been certified yet. Taking in mind that BPJPH estimated it could issue about 7,000 halal certificates every year, long delays are expected and failing to meet the deadline of October 2019 might not only result in sanctions but a drop of your sales.
Criminal sanctions are introduced under the new Halal Law and may be imposed on businesses with halal products as well as the LPH. For companies with halal certificates that fail to maintain their products’ halal quality will face up to IDR 2 billion fines or 5 years of imprisonment.
Besides, LPH that fails to protect the trade secrets such as the halal product formula which they evaluate will be subject to IDR 2 billion fines as well, or up to 2 years of imprisonment. This is the first time that criminal sanctions will be imposed on halal non-compliance.
According to Indonesian halal law, products or materials with halal certification from outside of Indonesia will need to be registered at BPJPH. Only then they can be distributed and sold in Indonesia with legal halal status.
However, halal certificates issued by foreign certification institutions that are not listed in the regulation will have to go through BPJPH assessments.
A huge number of products in Indonesia has yet to be registered even though the effective date of this new law is approaching. Therefore, delays are expected due to the large amounts of registration handled at the same time — especially when it gets closer to October 2019.
Once again, we urge you to proceed with the registration as soon as possible to prevent any delay in your halal product distribution in this profitable market. If you ever need any assistance for halal certification in Indonesia, Cekindo is always at your service. Contact us today.