New Law on Halal Product Assurance

The House of Representatives has enacted Law No. 33 of 2014 on Halal Product Assurance (“Halal Law”), which regulates the materials, processing, and certification of halal products, as well as international cooperation with foreign halal certification agencies.

Previously, halal certification was not set under any law and was implemented by the Indonesian Islamic Clergy Council (Majelis Ulama Indonesia – “MUI”). MUI was specifically appointed by the Minister of Religious Affairs (“MORA”) for halal certification of food under MORA Decree No. 519, dated November 30, 2001.

Within the MUI, halal certification of food was implemented by MUI’s Food and Drugs Supervisory Agency (Lembaga Pengawasan Pangan Obat dan Makanan Majelis Ulama Indonesia – “LPPOM MUI”).

♦  Obligation for Halal Certification and Identification of Non-Halal Products

The Halal Law requires all products that meet the halal requirements and enter, are circulated, or sold within Indonesia to be halal certified within the next five years (by October 17, 2019).

Certification is exempted for businesses that produce products from non-halal materials, but these must be labeled to indicate that they are non-halal.

♦  Definition of Halal

The Halal Law defines “Halal Products” as products that have been determined halal in accordance with sharia principles. The materials and production process of a product are the considerations in determining its halal status. Animal derivatives are considered to be haram (not halal) if they include carcass, blood, swine, and/or animals that are slaughtered not in accordance with sharia.

Plant derivatives may be deemed haram if they cause intoxication or harm the consumer. Other materials are deemed haram if mixed or contaminated with haram substances. The location and tools used in processing Halal Products must be separated from locations and tools used in slaughtering, processing, storing, packing, distributing, selling, and serving non-halal Products.

Unlike MORA Decree No. 518 on Procedures for Inspection and Determination of Halal Food, which only applied to food, products regulated under the Halal Law include goods and services related to food, beverages, drugs, cosmetics, chemicals, biological products, genetically modified products, and other consumable goods.

Biological products are produced by living organisms (human, animal, or microorganism), for example vaccines, antitoxins, and allergens. Genetically modified products are produced using organisms whose genetic materials have been altered; for example, fruits and vegetables modified to be resistant to viruses or pests.

♦  New Agency to Be Established

The Halal Law mandates the Government to establish a new agency, the Halal Product Assurance Agency (Badan Penyelenggara Jaminan Produk Halal – “BPJPH”) within three years after promulgation of the law.

BPJPH will be authorized to implement Halal Product assurance, including but not limited to halal certification. BPJPH will also cooperate with relevant ministries and/or agencies, Halal Inspection Institution (Lembaga Pemeriksa Halal – “LPH”), and MUI. This provision indicates the transition of halal certification from MUI to BPJPH. However, MUI still has a significant role in the process of Halal Product assurance.

Halal certificates are valid for four years and subject to extension.

♦  International Cooperation

The Government may conduct international cooperation in Halal Product assurance, including recognition of foreign halal certificates. Imported products bearing a halal certificate from an accepted certification agency will be automatically acknowledged as a Halal Product in Indonesia, after being registered by BPJPH. If the business does not register the halal certificate, the product will be subject to withdrawal from circulation.

♦  Transitional Provisions

Existing Halal Certificates are deemed valid until expiration. MUI has the authority to conduct halal certification until the establishment of BPJPH.

♦  Sanction

Failure to identify non-halal products or to keep separate halal and non-halal production facilities is subject to administrative sanction. Criminal sanctions will be imposed upon the following conditions:

  • Failure to maintain the halal status of a product that has obtained a Halal Certificate is punishable by imprisonment of up to 5 years or fine of up to Rp2 billion.
  • Any person involved in the implementation of halal assurance process who does not maintain the confidentiality of the formula of the product provided by the business is punishable by imprisonment of maximum 2 years or fine of maximum Rp2 billion.

November 5, 2014

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