Perppu Job Creation Series – Amendments to the Halal Products Law

This Newsflash is a part of our Perppu Job Creation Newsflash series with respect to the issuance of Government Regulation in Lieu of Law (Peraturan Pemerintah Pengganti Undang-Undang or Perppu) No. 2 of 2022 dated December 30, 2022 regarding Job Creation (the “Perppu Job Creation”), specifically for Law No. 33 of 2014 dated October 17, 2014, regarding Halal Products Assurance, or the “Halal Products Law”. Perppu Job Creation expressly repeals and replaces Law No. 11 of 2020 dated November 2, 2020 regarding Job Creation (the “Job Creation Law”) and took effect immediately as of December 30, 2022. Accordingly, the amendments to the Halal Products Law under the Job Creation Law are no longer in effect.

Please see below the notable amended provisions to the Halal Products Law under Perppu Job Creation.

One of the key amendments to the Halal Products Law under Perppu Job Creation relates to the validity period to the halal certicates. Under the Halal Products Law, halal certificates shall be valid for 4 (years) after their issuance by the Halal Product Assurance Agency (Badan Penyelenggara Produk Jaminan Halal or “BPJH”), save for any changes to the products’ ingredients composition. Perppu Job Creation amended the foregoing provision by stipulating that halal certificates shall be valid as of their issuance by BPJH and shall remain valid unless there are changes to the products’ ingredients composition and/or halal products process (proses produk halal or “PPH”). In other words, we note that Perppu Job Creation allows halal certificates to be valid for an indefinite time, subject to the foregoing limitations.

Under the Halal Products Law, an application to obtain a halal certificate shall be submitted to BPJH in writing. Perppu Job Creation stipulates a similar provision, but removes the requirement for such application to be made in writing. Accordingly, the application to obtain a halal certificate may be conducted online. Further, Perppu Job Creation stipulates that the verification period for halal certificate applications shall be conducted at the latest 1 (one) working day, whereas such period was not regulated under the Halal Products Law.

In relation to the above, Perppu Job Creation regulates that the inspections and/or testings for the halal status of the products shall be carried out by the Halal Auditor at the latest 15 (fifteen) working days, whereas such period was also not regulated under the Halal Products Law. Nevertheless, in the case that the products’ inspections requires additional time, Perppu Job Creation stipulates that the Halal Inspection Institution (Lembaga Pemeriksa Halal or “LPH”) may apply for an time extension to BPJH. Further provisions on the procedures of inspections and/or testings for the halal status of the products shall be regulated under the relevant Government Regulation.

With regard to the issuance of halal certificates, the Halal Products Law stipulates that the halal certificates shall be issued by BPJH at the latest 7 (seven) working days as of the receipt of the decree on halal status of products from the Indonesian Islamic Clergy Council (Majelis Ulama Indonesia or “MUI”), while Perppu Job Creation stipulates that halal certificates shall be issued by BPJH at the latest 1 (one) working day as of the receipt of the determination on halal status of the products.

Perppu Job Creation also adds several articles including, among others, a provision which in essence mandates the establishment of an integrated electronic system to conduct the services relating to halal products assurance, at the latest 1 (one) year after the enactment of Perppu Job Creation. Such electronic system connects all halal certifications process conducted by BPJH, LPH, MUI, the Halal Product Fatwa Committee (Komite Fatwa Produk Halal or “KFPH”), and PPH assistant (pendamping PPH).

Additionally, Perppu Job Creation mandates the establishment of KFPH which will consist of various ulama and academics and is directly responsible to the Ministry of Religious Affairs, at the latest 1 (one) year after the enactment of Perppu Job Creation. Until KFPH is established, the Government will carry out KFPH’s duties. Duties and authorities of KFPH stipulated under Perppu Job Creation includes the determination of halal status (i) in the case that the application for halal certificate is submitted by micro and small enterprises and (ii) in the case that MUI has not issued the determination of halal status of the products within 3 (three) working days as of the receipt of the examination results from LPH.

We note that the amendments to the Halal Products Law under Perppu Job Creation are in line with the Government’s intention to simplify all licensing processes in Indonesia, including to integrate the halal certification process into a unified electronic-based system and to make it more efficient and easier. Further, we note that the foregoing amendments may be advantegous for the relevant business actors, particularly considering that Perppu Job Creation allows the halal certificates to be valid for an indefinite time and removes the obligation to renew such certificates upon their expiration. Notwithstanding the foregoing, we anticipate the Government to issue several technical implementing regulations of the Halal Products Law. Thus, further implementation of amendments to the Halal Products Law under Perppu Job Creation remains to be seen.

It shall be noted that Perppu Job Creation was approved by the Parliament (Dewan Perwakilan Rakyat or “DPR”) on March 21, 2023 and Perppu Job Creation has been enacted as a Law.

March 28, 2023

AKSET

Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Thomas P. Wijaya (twijaya@aksetlaw.com), or M. Fatih Satria Kasmaliputra (mkasmaliputra@aksetlaw.com) for further information.

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