In May 2024, Indonesia’s government rolled out significant changes to its Indonesia Halal Certification Rules, a move aimed at ensuring more inclusive access for businesses nationwide, especially for Micro, Small, and Medium Enterprises (MSMEs). Following a limited cabinet meeting chaired by the President and key ministers, the decision was made to extend the halal certification deadline for MSMEs from October 1, 2024, to October 17, 2026, acknowledging the challenges smaller businesses face in adapting to the halal certification requirements. These changes, enacted through Government Regulation No. 42 of 2024 (GR 42/2024), update and supersede the previous guidelines under Government Regulation No. 39 of 2021 (GR 39/2021), creating a more flexible framework for halal compliance across the nation.
With Indonesia being home to the world’s largest Muslim population, the halal market is both vast and influential, impacting not only the food and beverage sectors but also cosmetics, healthcare, pharmaceuticals, and even lifestyle and travel. The updated halal certification rules hold implications for both domestic businesses and international companies aiming to access Indonesia’s lucrative market. This guide provides a deep dive into the new compliance structure, foreign certification rules, extended deadlines, and specific obligations businesses must meet to maintain compliance with the latest Indonesia Halal Certification Rules.
The Strategic Shift
The halal certification regulations play a crucial role in supporting Indonesia’s ambition to be a global halal hub, emphasizing the importance of halal integrity and consumer trust. However, achieving this goal requires cooperation from businesses of all scales. Small businesses, particularly those in rural or underserved areas, have encountered difficulties with the certification process due to limited resources, awareness, and access to inspection agencies.
To address these issues, Indonesia’s government took the proactive step to delay the halal certification requirement for MSMEs by two years. This extension allows smaller enterprises more time to prepare, while also enabling regulatory bodies like the Indonesia Halal Product Assurance Organizing Body (BPJPH) to expand resources and support. GR 42/2024 specifically tailors halal requirements according to business size and product category, giving MSMEs additional support in meeting certification standards that uphold Indonesia’s strong halal commitments.
What GR 42/2024 Means?
GR 42/2024 introduces a structured compliance timeline, replacing the uniform deadline previously set by GR 39/2021. This update allows MSMEs to comply at a pace that reflects their unique operational needs and capacities. Here’s a breakdown of the new timelines for halal certification:
Compliance Deadlines
| Business Scale/Category | Deadline |
|---|---|
| Medium and Large Enterprises | October 17, 2024 |
| Micro and Small Enterprises (MSMEs) | October 17, 2026 |
| Foreign Products and Services | To be determined by the Minister of Religious Affairs |
This tiered approach relieves pressure on smaller businesses, allowing them to complete the certification process by 2026 while still maintaining compliance with Indonesian standards.
Timeline for Non-Food
For non-food products that fall under Indonesia’s halal certification mandate, such as health supplements, over-the-counter medicine, and cosmetics, deadlines set in GR 39/2021 remain unchanged. These deadlines range from 2026 to 2034, depending on product type and risk classification. Some key deadlines include:
| Product Category | Certification Deadline |
|---|---|
| Health supplements, traditional medicine | October 17, 2026 |
| Over-the-counter medicine | October 17, 2029 |
| Drugs excluding psychotropics | October 17, 2034 |
| Cosmetics, clothing, headgear, household products | October 17, 2026 |
| Medical devices (Class A, B, and C) | Varies between 2026 to 2034 |
This staggered timeline for halal compliance ensures that businesses in diverse industries have adequate time to secure halal certification, thus enabling smoother integration into Indonesia’s halal market ecosystem.
Related: Ministry Clarifies Halal Certification for Wine Products in Indonesia
Permanent Validity
One of the most significant changes under Indonesia Halal Certification Rules in GR 42/2024 is the update to the validity period of halal certificates issued by BPJPH. Previously, halal certificates required renewal every four years, a process that added operational burdens and administrative costs for many businesses. Now, halal certificates have permanent validity—so long as no changes are made to the product’s material composition or halal production process (PPH). This means that businesses are relieved from the need to re-certify periodically unless they make changes to product ingredients or processing methods.
Should a business alter its halal product in any way, it is required to reapply for halal certification, submitting documentation that details the changes to BPJPH. This permanent validity approach simplifies compliance for businesses, especially for those with stable product lines, while maintaining flexibility to adapt to future product development.
The Impact of GR 42/2024
Indonesia’s halal certification updates also address foreign products, an important segment for a nation deeply connected to global trade. Under GR 42/2024, foreign businesses have a clearer path to halal certification through local representatives or importers based in Indonesia. These regulations provide several avenues for compliance, depending on the mutual recognition agreements (MRAs) between BPJPH and the foreign halal certifying bodies:
- No Foreign Halal Institution: If the exporting country lacks a recognized halal institution, the Indonesian importer must apply for certification.
- MRA Limitations: Even with an existing MRA, if it doesn’t cover certain products, an application through a local representative is required.
- No MRA Agreement: In cases where there is no MRA, businesses can apply voluntarily to gain access to the Indonesian market.
For foreign products already certified as halal in the country of origin, businesses may skip Indonesia’s halal certification process if the foreign halal certification body is recognized by BPJPH. However, these foreign certificates still need to be registered with BPJPH for the products to be distributed within Indonesia.
One notable update is the reduction of the deadline for foreign halal certificate renewals from 90 to 60 days before expiration, providing more agility for businesses to maintain compliance.
New Obligations for Halal-Certified Businesses
GR 42/2024 introduces enhanced requirements for halal-certified businesses to ensure ongoing compliance and integrity. These new obligations include:
- Halal Label: Every certified halal product must bear a visible halal label, allowing consumers to easily identify halal-certified goods.
- Halal Integrity: Businesses must uphold the halal status of products by preventing any form of contamination during processing, packaging, and storage.
- Separation of Facilities: Halal and non-halal products must be processed, stored, and handled in distinct spaces to avoid cross-contamination, particularly in facilities where both types of products are present.
- Reporting Changes: Businesses are required to inform BPJPH of any modifications to product ingredients or processing methods that may impact halal certification.
- Halal Consistency Certificate: Every four years, businesses must undergo an evaluation of their Halal Product Assurance System (SJPH) to renew their Product Halal Consistency Certificate. For micro and small enterprises, this assessment is based on risk analysis, reducing the burden on smaller businesses while ensuring halal compliance.
These obligations underscore Indonesia’s commitment to preserving halal integrity, as failure to adhere can lead to administrative sanctions. Penalties range from written warnings and fines to halal certificate revocation and product withdrawal from the market.
Navigating Indonesia’s Halal Certification
Complying with Indonesia’s halal certification standards can be challenging, particularly for MSMEs and foreign companies new to the market. Here are some actionable steps to help businesses navigate these requirements successfully:
- Internal Compliance Review: Assess current product composition, processing methods, and facility organization to ensure they meet Indonesia’s halal requirements.
- Collaboration: Partnering with halal consultants or legal experts familiar with BPJPH and Indonesia’s halal market can expedite the certification process, especially for companies with complex product lines.
- Halal Assurance System (HAS): Establishing an internal HAS can help streamline compliance, making it easier to keep production processes aligned with halal standards.
- Government Support Programs: Indonesia offers various support programs for MSMEs to help ease the financial burden of halal certification. Taking advantage of these resources can be particularly beneficial for smaller businesses.
Indonesia’s Halal Market Growth
The recent changes to Indonesia Halal Certification Rules reflect Indonesia’s ongoing push to become a global leader in the halal economy. According to a report by the State of the Global Islamic Economy, Indonesia ranks as one of the top five countries in the global halal market, fueled by its large Muslim population and government-backed initiatives.
The halal economy in Indonesia encompasses diverse sectors, from food and pharmaceuticals to cosmetics, tourism, and fashion. This growth creates ample opportunities for businesses to tap into new markets by aligning with Indonesia’s halal standards. For foreign businesses, compliance with BPJPH’s certification rules offers a direct route to Indonesia’s extensive consumer base, potentially opening doors to broader Southeast Asian markets.
Indonesia’s Evolving Halal Ecosystem
While GR 42/2024 introduces some flexibility, Indonesia’s halal certification rules are expected to continue evolving. As the nation cements its position as a halal leader, businesses must remain vigilant to regulatory updates that may affect product categories, certification deadlines, and compliance obligations.
Regularly consulting BPJPH’s resources and maintaining communication with Indonesian halal experts can help businesses stay prepared for potential shifts in the regulatory landscape. By remaining agile and proactive, businesses can continue to meet halal standards while capitalizing on Indonesia’s growing halal market potential.
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