Halal Update 2019: Indonesia streamlining Halal Certification through New Government Agency (BPJPH)
According to the Indonesian Law No. 33/2014, Halal certification is mandatory in Indonesia for all food, beverage, drugs, cosmetics, chemicals (used for human consumption), organic and genetically modified products sold in Indonesia as well as for the machinery and equipment involved in processing these products. It follows that in 2017 the Halal Product Assurance Agency (BPJPH - in Bahasa Indonesia) is established under the Ministry of Religious Affairs. The obligatory of Halal certification will start from 2019, where BPJPH will be the lead in these services.
The Halal Law is of strong relevance to manufacturers of consumable goods, medicines, cosmetics, chemical products, genetically engineered products, as well as importers of these products. Since full operation of the law is next year (2019), companies will only have brief time to be compliant to this law No. 33/2014 before all new Halal certifying and auditing agencies under the auspices of the Ministry of Religious Affairs are fully up and running.
Halal products are consumable products such as food, beverages, drugs, cosmetics, chemical products, biological products, genetically engineered products, or any goods that can be use and applied by humans in accordance with Islamic principles (“Halal Products”).
The subject matter of Halal Products is the raw materials and manufacturing processes for such products (chapter III). Raw materials derived from certain animals are considered haram (opposite to halal) including corpses, blood, and pork. (Article 18: 1).
Plants may also be considered as haram, if they cause drunkenness and/or are hazardous to human health if consumed. The Minister of Religious Affairs (“Minister”) will further determine what type of plants and animals are not halal.
Halal manufacturing processes require that the location, facilities, equipment, processing, storage, packaging, distribution, and sale of Halal Products be strictly separated from non-halal products. Additionally, Halal Products manufacturing facilities must be kept clean and hygienic, free from impurities (najis), and free from non-halal materials.
Halal Certification Procedure
BPJPH will take over MUI’s role, which was previously the sole institution that issued halal certificates. The law No. 33/2014 mandates the establishment of BPJPH that was created in 2017.
Although halal certificates will be issued by the BPJPH, the process of verifying whether or not a product is halal will be carried out by a different party, namely the Halal Inspection Institution (Lembaga Pemeriksa Halal or “LPH”). In general, LPH will check and verify whether or not the raw materials and manufacturing process are halal. These activities may be carried out inside or outside the manufacturing facility.
LPH may be established by the government and public institutions such as universities. To run its operations, LPH must be accredited by BPJPH, employ at least 3 inspectors, and has its own laboratory or cooperate with another party that has a laboratory.
The Bill introduces criminal sanctions that may be imposed on businesses holding halal certificates and also on LPH. Holders of halal certificates that fail to maintain the halal quality of their products may be subject to 5 year imprisonments or IDR 2 billion in fines.21 LPH, on the other hand, may be subject to 2 years imprisonment or IDR 2 billion in fines for failing to safeguard trade secrets in the form of the formula of products that they evaluate.
Note that this is the first piece of legislation to impose criminal sanctions for non-compliance with halal related rules, as previously under the MUI regulation criminal sanctions were not possible due to the nature of its status of being an Islamic non-profit organization
Foreign Halal Certificates
Products from overseas that already have Halal certificates from foreign countries will be acknowledged in Indonesia. The acknowledgement, however, is not automatic as there must be cooperation in place between the government of Indonesia and the foreign government from where the Halal product originates.
The Netherlands has three (3) accredited Halal certification bodies registered in Indonesian system. They are: Halal Quality Control (HQC), Total Quality Halal Correct Certification (TQHCC), and Halal Feed and Food Inspection Authority (HFFIA). Please contact these three organizations prior to your product sales to Indonesian market.