How To Use Blockchain Tech To Simplify Halal Certification Process?

We all know that we, the Muslims are net importers of Halal food from non-Muslim countries. In fact, 85% of whatever we consume comes from non-Muslims.

On the other hand, there are millions of food companies in the Muslim world that are not yet working with their full potential to supplying Halal food to the Muslim world.  However, they can export their products if they get a verifiable Halal certification from a reputable Halal certification body.

To solve that problem,  recently a start-up in Indonesia has started using blockchain to simplify the Halal certification process where more than 1.5 million businesses are trying to get Halal certification. 

Indonesia’s up-and-coming halal certification law means that 1.5 million businesses in the country are scrambling for certification in the market

Indonesia is set to implement a new regulation on halal certification for various consumer products, from food to cosmetics to pharmacy.

Under the new regulation, businesses in the world’s largest Muslim country are required to undergo a certification process and secure a halal label with a grace period of three years. Failure to comply with this new regulation will result in administrative penalties.

With the up-and-coming regulation, there are 1.5 million businesses in the market scrambling for a halal stamp on their products –and this is the opportunity that Singapore-based blockchain startup WhatsHalal is aiming to seize.

According to some media reports, the company’s director of business development Muhammad Hadi Bin Rahmad explains the two challenges that businesses and governments are facing in implementing halal certification:

First, there is the lack of a unifying platform that brings together all the stakeholders in the whole supply chain together, from farmers, manufacturers, merchants, to consumers.

Second, there is also the administrative roadblock. “Every single stakeholder in the supply chain has a different process and system. It is also quite labor-intensive,” the director says.

In the case of Indonesia and its upcoming halal certification regulation, businesses and government are facing a new challenge.

There are currently 17,000 companies that have been certified halal in the market, and the country needs to increase this number to five million within the next five years.

Whats Halal CEO Azman Ivan Tan elaborates on the process that companies had to go through to secure a halal certification, and how the WhatsHalal platform can help ease this process.

First, businesses need to decide on what kind of certification (by which institution) they want to obtain. Then they will need to make sure that all of their ingredients come from halal sources; they will also need to understand the ruling and assurance system.

“Normally, these companies would bring on a consultant. After the audit process, in which they may pass or fail, they would feel the need to go back and see the changes that they have to make [before they can get certified],” he explains.

With Whats Halal, companies begin their journey in using the platform by choosing the market that they wish to operate in. The platform will show them if they can undergo the audit process by themselves, or if they would need a consultant to do it for them.

“If it’s too tedious for you, the system will assign a consultant for you. If you’re happy with the consultant, you pay the fee, and the consultant will take over from there. They will upload the ingredients and the blockchain will assist in verifying whether they are halal, to begin with,” Tan says.

The main issue that the company aims to tackle is the uncertainty about a particular food product’s halal status.

“In the past, we tended to take the attitude of ‘everything is halal unless otherwise stated’ but then I realized that [customers] do not have a clear understanding of what is halal, as not everything that is manufactured today has full ingredients disclosure. You cannot see where the source is,” Tan stressed.

In addition to the halal certification process, WhatsHalal also provides other services such as on-demand food delivery service.

The startup expanded this service through the acquisition of HalalOnClick in 2018.

In the future, it also aims to introduce a halal scanner for end customers, leveraging on the wealth of data that the startup has acquired and its ability to track a product down to its source.

“The halal certification platform is just the first of the technologies that we are working on. The second part of the technology is traceability – it is what sets us apart from other companies which are talking about blockchain. We are looking at devices such as IoTs, RFIDs … that we will be putting in places in the supply chain,” Rahmad explains.

“The value of wagyu beef in Japan is that high because of the details available in its certificate,” he adds.

Whats Halal is currently run by a team of 21 employees in Singapore, Kuala Lumpur, and Jakarta.

In Indonesia, it has secured a partnership with Sucofindo, a joint venture between the Indonesian government and SGS, a Geneva-based inspection giant.

Currently internally funded, Tan hints that there are already some external parties expressing their interest in investing in the company.