Halal industry in Indonesia is booming in recent years, thus companies’ demand in halal certification registration in Indonesia has also changed considerably.
Alongside with the national aim to make Indonesia as the world halal hub, the industry is gaining its popularity day by day and opens up opportunities to halal product producers to expand their target market domestically and internationally.
There are roughly 88% of Indonesia’s 250 million people being Muslim and the nation’s home to about 13% of the world’s Muslims, thus making it a good start for Halal businesses.
This article is designed to give companies a guidance for halal certificate registration in Indonesia. The following paragraphs will first concentrate on studying the halal business potential and the practices of halal according to the Halal Assurance System (HAS) criteria.
The Concept of Halal
The halal concept serves as a guideline for Muslims in all aspects of consumerism and consumption of products and services. Bound by the Islamic dietary laws, Muslims would check and judge the permissibility and prohibitive nature of all foods and drinks before consumption to prevent them from consuming forbidden and doubtful products.
Halal Certification Regulations
The authority responsible for the issuance of halal certificates is the Indonesian Ulama Council (MUI) which is the country’s highest authority on Islamic affairs.
The two authority bodies for Halal Certification in MUI are The Food, Drug and Cosmetics Assessment Agency (LPPOM) and MUI Fatwa Committee halal standard in Indonesia is established based on MUI’s Fatwa or Sharia Law.
The Food, Drug and Cosmetics Assessment Agency (LPPOM) is an institution under MUI which one of the duties is conducting halal examination, audit and assessment.
MUI Fatwa Committee is one of MUI committees who issues fatwa or Islamic shariah decree based on the results of examination by LPPOM MUI as an investigative or examining body in halal certification process.
At present obtaining halal certification is based on voluntary initiatives. However, lawmakers in the country are trying to push for the enactment of a Halal Product Protection Bill which if passed by the House of Representatives will make it mandatory for all products to be halal-certified before going to the market. With this law, halal certificates and labels will be required for all packaged foodstuffs, beverages, medicines and cosmetics produced and sold in Indonesia.
Certifications are expected to cover ingredients and the equipment used to make the products. The bill also proposed stiff penalties on offenders ranging from a 2-year jail term with IDR1 billion/ USD154,000 fine to an 8-year jail term and IDR6 billion/ USD460,000) fine.
Halal Certification Process
Halal Certification is a process through a certain procedure that involve both producer and LPPOM MUI to prove that the materials used, production facility, production process and halal assurance system of the producer have met halal requirement of LPPOM MUI, thus the products produced can be declared as halal products by Fatwa Committee and written in a halal certificate.
The following chart shows the steps for companies applying for a halal license by using Straits Partners’s service.
Halal Standard on Product in Indonesia
There are so many different Halal standards in the world with the halal standard in Indonesia for instance is established based on MUI’s Fatwa or Sharia Law.
The halal standard in Indonesia requires companies to follow the below requirement:
Brand of name of the products must not use a name which tends to haram things nor practices that is inappropriate with Sharia Law
Characteristic/ sensory profile of product must not imitate haram product
The halal standard also covers sources products that can be used or may not be used in a product.
The following substances are Halal unless containing or come into contact with a Haram substance. For instance, animals used for products are halal except the followings:
Animals that are not slaughtered according to Sharia Law
Pigs and dogs and their descendants
Animals with long pointed teeth or tusks which are used to kill prey such as tigers, bears, elephants, cats, monkeys, et cetera
Birds with talons or predator
Pests such as rats, centipedes, scorpions and other similar animals
Animals that are forbidden to be killed in Islam such as bees , woodpeckers, et cetera
Creatures that are considered repulsive such as lice, flies, et cetera
All aquatic animals (those which live in water and cannot survive outside it, such as fish) are halal except those that are poisonous, intoxicating or hazardous to health
Animals that live both on land and water such as crocodiles, turtles and frogs are not halal. However, the products from hazardous aquatic animals are halal when the toxin or poison has been eliminated during processing, as permitted by Sharia Law
All types of plants and plant products and their derivatives are halal except those that are poisonous, intoxicating or hazardous to health. However, the products from hazardous plants are halal when the toxin or poison has been eliminated during processing, as permitted by Sharia Law
All types of mushroom and microorganisms (i.e. bacteria, algae and fungi) and their by-products and/or derivatives and all natural minerals and chemicals, are halal except those that are poisonous, intoxicating or hazardous to health
All natural minerals and chemicals are halal except those that are poisonous, intoxicating or hazardous to health. All kinds of drinks and beverages are halal except those that are poisonous, intoxicating or hazardous to health
Any food and beverages, cosmetics or pharmaceutical products containing products and/or by-products of Genetically Modified Organisms (GMOs) or ingredients made by the use of genetic material of animals that are non-halal by Sharia Law are not halal and strongly prohibited
Halal Certification of All Ingredients
The Indonesian Ulama Council (MUI) has set this benchmark to further engage all companies in Indonesia to recognize safety and quality assurance of their products, thus whenever there is a product entering, circulating and being traded in the territory of Indonesia, it must be clean, safe, well taken care of with good presentation, served in a proper manner and of quality for everybody.
Notably, the halal standard in Indonesia carries an identical aspect with most of the Muslim countries’ (i.e., Malaysia) and although these aspects are similar to Western countries’, they tend to differ in some critical points. For example, the types of stunning, acceptance of mechanical slaughtering, ethanol concentration in final products in Indonesia may be different to Australia’s points due to cultural values.
Halal Assurance System (HAS)
Implementation of the Halal Assurance System (HAS) is a prerequisite step for obtaining halal certification.
To make sure you are in the compliance with the HAS document which contains standard Manual of HAS, you should already list of your products’ raw materials, have a record/ written documents of all steps related with production system including purchasing documents, warehousing/ storage, material issue voucher, implementation of working instruction and SOP(s), etc.
You are recommended to ask your vendors or suppliers to provide their halal certificates for any ingredients they supply for your products, and if your ingredient does not have halal documentation or when MUI does not recognize a halal certificate, Straits Partners will help to find an alternative ingredient which is confirmed as halal.
The Halal Assurance System has to be documented in detail in a manual book format, so we will have to educate you in both the Halal Assurance System and the standard operating procedure for how to uphold the assurance.
If your company is new and has not obtained Halal Certificate, HAS documents needed are:
HAS Document contains at least an official statement to submit Manual of HAS
HAS Document contains at least Halal Policy, halal management organization and scope of HAS implementation
If you just wish to renew your halal certificate, then HAS documents needed are:
HAS Document contains HAS implementation report on recent condition or revised HAS Manual or statement letter mentioning the company has got at least B grade or copy of HAS certificate
The Manual of HAS that your company must set up consists of:
Halal Management Organization
Standard Operating Procedures (SOPs)
Internal and External Communication System
Internal Audit System
Corrective Action System
Management Review System
After all the documents have been submitted, Straits Partners team will guide you through the rest of the HAS process such as providing you an assistance to follow the principles and procedures of HAS Manual.
Straits Partners does the registration for your halal products into the MUI online system, and after the forms are submitted and verified, a team of auditors from the MUI Food and Drug Analysis Agency (LPPOM) will conduct an audit at the location of production for your business.
During the assessment, LPPOM MUI will also give you questionnaire for assessment of HAS Manual. Before the assessment, we will provide you the points of HAS manual that will be checked and making sure you met with the assessment criteria, passed with the appraisal and audit.
The object of audit is proofs of system implementation from material purchasing system, material receiving, material storage, new product LPPOM – MUI general guidelines of halal assurance system, material removal/changes, vendor/supplier changes, internal and external communication, production planning, production process, and final product storage to transportation.
Once you have passed the audit and lab tests (if needed) inspection, we will inform you of your halal certificate issuance.
Obtaining Your Halal Certification
Some companies lack a comprehensive knowledge regarding halal regulation in Indonesia, thus most halal products in the country lack official approval. According to the Food and Drug Monitoring Agency, only 37% of all halal products for sale in Indonesia have official halal certificates. The Agency cited lack of awareness among manufacturers about the need for halal certification, thus we take the initiative to communicate with you on halal procedures so that you are informed and aware of the importance of going halal.
We will work to make sure your company understands the needs of halal certification in Indonesia which are to open up distribution channels and visibility to the Muslim consumer.
Straits Partners provides a service to help you meet the policy, criteria and procedure of The Food, Drug and Cosmetics Assessment Agency (LPPOM), so you don’t need to worry about obtaining the MUI Halal Certificate.
Besides using checklist to scrutinize all raw materials that you use, we will provide you a set of guidelines and procedures covering documents and help you with the process to fulfill the Halal compliance and receive halal declaration for your products.
We believe that following the route of certification is a rewarding process, and is essential for winning the trust of your consumer.
Halal Business Potential in Indonesia
Being the world’s most populous Muslim country (88%), Indonesia is a halal market goldmine with the potential to become not only a major market but also a major producer of halal products. The halal food market is estimated at around IDR130 million/ USD10 billion) annually with an annual growth of 7-10% whilst its annual halal food expenditure is over IDR915 million/ USD70 billion).
Table below illustrates the importance of halal labeling to Muslim consumers and how halal labeling influence their desire in purchasing a product.In Indonesia, the non- Muslims constitute around 10% of the population. This percentage number of the non- Muslim consumers could also indicate the opportunity for this market to be tapped as the niche halal market which could then contribute more to the growth of halal products industry.
Advantages of Obtaining Halal Certification
The market demand for halal compliance products is growing constantly in Indonesia and worldwide. Below are some advantages of obtaining your halal certification:
Halal certificate may enhance the marketability of your products to over 250 million Halal consumers in Indonesia and over a billion worldwide
If you are exporting or planning to export then your Halal certificate that was obtained through us, will help you to meet the importing countries requirement
If your product is used as an ingredient by your customer then it will help your customer obtain Halal certification and therefore maintain your customers and may also increase your sales
Halal certified products in Indonesia shall be advertised as Halal and this will display the registered trademark Halal logo on their packaging, hence making your products readily acceptable by Halal consumers
Halal system has covered most important business sectors in Indonesia, and yet many companies still have an inadequate knowledge in understanding the Halal concept and practices.
If your company can maintain sustainability of HAS certificate 3 times respectively, in the fourth renewal period of Halal certificate, audit on factory location will not be necessary to be performed anymore as long as there are no changes of materials, processing technology or factory. Audit will be performed only on administration/documentation. At this level, the validity of HAS certificate will be 2 years, and it will be evaluated for its renewal.
Unfortunately, halal certifications from foreign countries are not accepted in Indonesia, so every product has to obtain a new Indonesian license.
Let us help you with your halal certification registration by reaching us through phone, mail or visit us in person by scheduling a meeting with one of our consultants.
Feel free to reach out to us at [email protected]