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Oct

04

Halal Certification: The Key for International Companies to Enter the Indonesian Market

Under President Joko Widodo’s leadership, Indonesia has set an ambitious strategy to become the global center of the halal industry and a fashion capital of the world. This goal is expected to be achieved in the near future, thanks to the government’s intensive efforts to strengthen international cooperation and improve the halal certification system.

To realize this vision, the Indonesian government has intensified collaboration with countries such as Saudi Arabia, Korea, the Philippines, and Singapore. This cooperation includes forming technical teams and signing memorandums of understanding (MoUs) related to halal certification. The aim is to deepen collaboration in halal product assurance, strengthen Indonesia’s position in the global halal ecosystem, and broaden access for Indonesian halal products in the international market.

The government is also implementing incentive policies to encourage local companies and small and medium-sized enterprises (SMEs) to actively pursue halal certification. Corporate social responsibility (CSR) programs are expected to expand participation and provide significant benefits to communities and businesses in Indonesia.

According to Government Regulation No. 39 of 2021, starting October 17, 2024, all food, beverage, meat, and poultry products entering Indonesia must have halal certification. This requirement also applies to companies providing catering and slaughter services. Companies that fail to comply or maintain the halal status of their products will face administrative sanctions, import bans, and product seizures. Foreign products lacking halal certification will face difficulties entering Indonesia through formal channels and cannot be marketed, especially in the large Muslim segment.

Since the enactment of the Halal Product Assurance Law No. 33 of 2014, halal certification issuance has been transferred from the Indonesian Ulema Council (Majelis Ulama Indonesia or MUI) to the Halal Product Assurance Agency (Badan Penyelenggara Jaminan Produk Halal or BPJPH) as of 2019. Although halal certificates issued by MUI before 2019 remain valid until their expiration date, BPJPH is now the official body responsible for issuing halal certifications and registering certifications for foreign products.

Currently, only nine Halal Testing Institutes in Indonesia are authorized to accept halal certification from foreign companies. Therefore, it is crucial for foreign companies to be cautious of claims that certification from non-BPJPH bodies can be directly accepted in Indonesia without official recognition, as this could lead to legal and business issues.

Halal certification in Indonesia is stringent to ensure compliance and credibility. This is an important aspect for foreign companies wishing to enter the Indonesian market. With ongoing population growth, geo-economic dynamics, and regional trade developments, halal certification is key for products to gain greater competitiveness in the Indonesian market.

Products that have obtained halal certification will have easier access to and circulation in the Indonesian market, particularly in the significant Muslim segment. This certification opens up significant opportunities for companies to expand their market reach and enhance their product visibility internationally.

  1. BPJPH (Badan Penyelenggara Jaminan Produk Halal): A government body under the Ministry of Religious Affairs responsible for halal product assurance policies, issuing halal certificates, and registering halal certifications for foreign products.
  2. MUI  (Majelis Ulama Indonesia): The Shariah Committee of MUI determines the halal status of a product based on test results. This decision serves as the basis for BPJPH to issue the Halal Certificate.

Both agencies play a crucial role in ensuring product halal-ness through testing and issuing official certificates, which helps maintain the standards and quality of halal products in Indonesia. With these strategic measures, Indonesia aims not only to become a global halal industry centre but also to strengthen its position as a global fashion hub, making it a highly attractive market for international halal products.

If you, a prospective client, have further inquiries about the topic discussed above, Schinder Law Firm is one of many corporate law firms in Indonesia that has handled numerous similar matters, with many experienced and professional corporate and civil lawyers in its arsenal, making it one of the top consulting firms in Indonesia. Feel free to contact us at info@schinderlawfirm.com for further consultation.

Author:
Dewi Susanti

Schinder Consultant London Ltd.

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