Indonesia Enacts New Halal Law For Global Exporters

The export certification landscape in Indonesia has experienced substantial changes with the implementation of Law 33/2014 on Halal Product Assurance, widely known as the Halal Law. This legislation has broadened the scope of halal certification, introducing new requirements for businesses exporting products to Indonesia, and making compliance more critical for global exporters.

Export Certification in Indonesia: Expanded Requirements

Before the Halal Law, halal certification in Indonesia primarily focused on food and beverages within the domestic market. However, the introduction of Law 33/2014 has significantly expanded the scope, requiring halal certification for a wider range of products and services in the export industry, including:

• Slaughtering: Ensuring animals are slaughtered following Islamic guidelines.
• Processing: Guaranteeing that food products are processed in a halal-compliant manner.
• Storage: Maintaining halal conditions throughout the storage process, ensuring no contamination.
• Packaging: Using halal-compliant packaging materials and adhering to Islamic principles during the packaging process.
• Transportation: Ensuring products are transported without risk of contamination by non-halal items.
• Marketing: Ensuring marketing materials are aligned with halal standards.
• Product Presentation: Ensuring the overall presentation adheres to Islamic principles.

New Regulatory Framework for Exporters

The Halal Law has also established a new central authority, the Halal Product Assurance Organising Agency (BPJPH), which is responsible for overseeing halal certification in Indonesia. Exporters looking to tap into the Indonesian market must navigate this regulatory framework and meet new requirements, including:

• Pre-Export Certification: Exporters must obtain halal certification from BPJPH or an authorized Halal Certification Body (HCB) that has been approved by BPJPH for specific product categories. This applies to countries like Australia, where HCBs must meet Indonesian standards.
• Dedicated Halal Supply Chains: Businesses must maintain clear segregation between halal and non-halal products throughout production, processing, storage, and transportation to ensure compliance.
• Enhanced Labeling Regulations: Exporters must comply with strict labeling guidelines, ensuring that halal and non-halal products are clearly distinguished and accurately represented.
• Importer Registration: Indonesian importers are required to register their HCB-issued halal certificates on BPJPH’s online portal, SiHalal, ensuring transparency and regulatory compliance.

The global halal market is experiencing exponential growth, with increasing demand driven by the rising global Muslim population. Indonesia, home to the largest Muslim population in the world, is playing an integral role in the international halal market. With stringent halal regulations in place, ensuring compliance with the Halal Law is vital for businesses looking to maintain their foothold in this expanding market.

Opportunities and Challenges for Exporters

The revised halal certification requirements present both opportunities and challenges for exporters:

Opportunities:

• Access to a Growing Market: Compliance with Indonesia’s halal certification opens the door to a rapidly expanding halal market, providing businesses with access to a broader range of consumers in the Muslim-majority region.
• Differentiation and Credibility: By obtaining halal certification, businesses can stand out in the marketplace, enhancing their credibility and trustworthiness among halal-conscious consumers.
• Increased Global Reach: Meeting the standards of Indonesia’s Halal Law may also align with the halal requirements of other countries, helping exporters expand into other halal markets.

Challenges:

• Cultural Sensitivity and Compliance: Understanding the specific cultural and religious requirements of halal certification is crucial for maintaining compliance and avoiding potential missteps.
• Increased Costs: Implementing dedicated halal supply chains and meeting strict labeling and certification requirements may increase operational costs for some businesses.
• Ongoing Updates: Exporters must stay informed about any updates or changes in halal regulations, as compliance requirements may evolve.

Key Considerations for Exporters

To successfully navigate Indonesia’s halal certification landscape, businesses should consider the following:

• Local Partnerships: Collaborating with local partners can offer valuable insights into the Indonesian market and simplify the halal certification process.
• Continuous Updates: Keeping up with regulatory updates is essential for maintaining compliance and ensuring smooth operations in the Indonesian market.
• Expert Guidance: Seeking advice from consultants or experts specializing in halal certification can help streamline the process and ensure that businesses remain compliant with Indonesian regulations.

Seizing the Halal Market Opportunity

Indonesia’s halal certification landscape is evolving, and businesses that proactively align with these new requirements will be well-positioned to succeed in the global halal market. With halal exports on the rise, companies that understand the intricacies of the Halal Law and take the necessary steps to ensure compliance will benefit from increased market access and growth opportunities. As the global halal market continues to expand, staying ahead of regulatory changes and maintaining a strong commitment to halal principles will be key to long-term success.