In 2021, the government introduced Regulation of the Government No. 39 of 2021 on the Organization of Halal Product Guarantees (“Regulation 39/2021”), which, until recently, served as the framework for the oversight of and regulatory measures for halal products, including certification, auditing and product distribution. It should be noted that Hukumonline’s Legal Research and Analysis Team previously summarized the various provisions that feature under Regulation 39/2021 in the following edition of Indonesian Legal Brief (“ILB”): “Govt. Finally Updates Provisions on the Implementation of Halal Product Guarantees”.

However, as the legal basis for the issuance of Regulation 39/2021, i.e. Law No. 33 of 2014 on Halal Product Assurance, has been amended several times, most recently through Law No. 6 of 2023 on the Stipulation of Regulation of the Government in Lieu of Law No. 2 of 2022 on Job Creation into Law, the government is currently completing work on a Draft Regulation that will ultimately replace and bear the same title as Regulation 39/2021 (“Draft Regulation”).[1]

In addition to further clarifying various mandates that are required to be borne by business actors and Halal Inspection Agencies (Lembaga Pemeriksa Halal/LPH), the Draft Regulation notably alters the validity period for halal certificates to permanent, lifetime validity and also expands facilitation for micro- and small-scale enterprises. It is also important to note that if this Draft Regulation is ultimately enforced, then the phasing in of mandatory halal certification for food, beverages, slaughter products and slaughtering services will apply within the following timelines:[2]

Against the above backdrop, this edition of ILB summarizes the new provisions that are set out under the Draft Regulation, specifically as they relate to the following matters:

1. Obligations of Business Actors;
2. Micro- and Small-Scale Enterprises: Halal Supervisors and Assistance; and
3. Certificates: Validity, Changes and Applications for Foreign Products.

Obligations of Business Actors

While maintaining the various obligations that have to be met by all business actors who apply for halal certification, the Draft Regulation introduces several additional obligations that apply to parties who have already secured halal certification, as follows:[3]

1. Must affix halal labelling to any products for which halal certification has been secured;
2. Must ensure the halal integrity of all products for which halal certification has been secured;
3. Must separate all locations, facilities and equipment that are used for slaughtering, processing, storage, packaging, distribution, sales and presentation for all halal and non-halal products;
4. Must update the relevant halal certificates if any changes are made to the relevant composition of materials and/or halal production processes (Proses Produk Halal – “PPH”); and
5. Any changes that are made to the relevant composition of materials and/or PPH must be reported to the Halal Product Assurance Agency (Badan Penyelenggara Jaminan Produk Halal – “BPJPH”).

In order to demonstrate that the halal integrity of a given product has been consistently maintained post-certification, business actors may secure a letter of consistency for halal product assurance based on an inspection of the implementation of the Halal Product Assurance System (Sistem Jaminan Produk Halal – “SJPH”). SJPH implementation inspections will be conducted once every four years.[4]

Micro- and Small-Scale Enterprises: Halal Supervisors and Assistance

In terms of micro- and small-scale business actors specifically, the Draft Regulation outlines the various duties and responsibilities of appointed halal supervisors, as detailed in the table below:[5]

Overall, the above-listed specialized arrangements result in fewer responsibilities for halal supervisors working for micro- and small-scale enterprises in comparison with supervisors who are working for larger businesses, whose responsibilities also encompass risk management and reporting on halal product process oversight.[6]

In addition, the Draft Regulation specifies that halal supervisors (penyelia halal) for micro- and small-scale business actors may come from the following types of entities:[7]

1. Islamic religious community organizations;
2. The relevant business actors themselves;
3. Government agencies;
4. Business entities; or
5. Universities.

In line with the facilitation that is provided to micro- and small-scale enterprises through halal declarations, the framework of Regulation 39/2021 also provides assistance for PPH (pendampingan PPH). In this regard, the Draft Regulation further clarifies that such assistance must be completed within ten days of the submission of halal certification applications by business actors.[8]

Certificates: Validity, Changes and Applications for Foreign Products

The Draft Regulation introduces a major change to the validity periods of halal certificates, which, under existing rules, remain valid for periods of four years from their dates of issuance by BPJPH. However, under the new regulation, halal certificates will be issued with permanent validity, provided that no alterations are made to the material composition and/or PPH of the relevant products.[9] As a consequence, renewals for issued certificates will no longer be required.

However, it should be noted that business actors who modify the compositions of their materials and/or PPH after they have secured halal certification will be required to update their halal certification. Applications for such changes should be submitted to BPJPH via an integrated electronic system and should be accompanied by various supporting documents (e.g. documentation of changes to material composition, proof of the halal nature of the relevant modified materials, product development information and so forth).[10]

In terms of applications for the halal certification of foreign products, the Draft Regulation further stipulates that such applications may be submitted through importers or official representatives based in Indonesia in line with the following conditions:[11]

1. There is no halal certification body in the relevant country of origin;
2. The foreign halal certification body, which has established mutual recognition with BPJPH, does not have certification competency in terms of the scope of the relevant products;
3. No mutual recognition agreement exists between the relevant foreign halal certification body and BPJPH; or
4. The business actor voluntarily seeks certification.

Ultimately, it is essential to highlight the fact that the Draft Regulation has now adjusted the timeframe for the submission of applications for the renewal of halal certificates granted by foreign certification bodies that have mutual recognition agreements with BPJPH (“Foreign Halal Certificates”). A comparison between the renewal rules and the frameworks of the Draft Regulation and Regulation 39/2021 is set out in the following table:

Key Takeaways

The Draft Regulation represents a transformative shift in the halal certification landscape, reflecting the government’s move to modernize and streamline the certification process in response to industry demands. By extending the validity of halal certificates indefinitely and expanding facilitation for micro- and small-scale enterprises, the Draft Regulation acknowledges the need for regulatory flexibility while maintaining the integrity of the halal assurance system. This forward-looking approach reflects the government’s broader vision to strengthen the integrity of halal products while fostering an environment that supports growth and innovation within the halal business sector both domestically and internationally.

Source: hukumonline.com