Lifetime Halal Certification as the New Standard for the Indonesian Market

Halal certification is a critical component for businesses operating in Indonesia, especially given the country’s significant Muslim population and stringent regulatory standards. Ensuring that products meet halal standards not only fosters consumer trust but also positions businesses for success in a highly competitive market. With recent regulatory changes, the process for obtaining and maintaining halal certification has been significantly transformed.

The Indonesian government has introduced a new regulation that will issue lifetime halal certificates for products, eliminating the need for renewals that were previously required every four years. This change comes as part of a broader strategy to modernize and streamline the halal certification process, making it more business-friendly while maintaining product integrity. This article delves into the details of the new regulation, its impact on businesses, and the strategic considerations necessary for compliance.

Overview of the New Halal Certification Regulation

In 2021, the Indonesian government enacted Regulation No. 39 of 2021 on the Organization of Halal Product Guarantees. This regulation served as the primary framework for overseeing halal product certification, auditing, and distribution. However, in response to amendments made to the legal basis of halal certification under Law No. 6 of 2023, the government is now in the process of introducing a Draft Regulation that will replace Regulation No. 39 of 2021.

The new regulation introduces significant changes, notably the shift to permanent, lifetime validity for halal certificates. This update eliminates the need for businesses to renew their certificates every four years, provided that there are no changes to the product’s composition or production processes. Here’s a closer look at the regulatory framework:

1. Law No. 33 of 2014 on Halal Product Assurance:
   This law established the foundational principles for halal product assurance and set the initial standards for halal certification, including the validity period of certificates.
2. 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:
   This amendment to the previous laws paved the way for the introduction of a draft regulation that streamlines the certification process and provides a more flexible framework for businesses.
3. Draft Regulation on the Organization of Halal Product Guarantees (Replacing Regulation No. 39 of 2021):
   The new draft regulation outlines the rules for permanent halal certificates, expands facilitation for micro- and small-scale enterprises, and adjusts the timelines for the mandatory phasing in of halal certification.

Key Changes Introduced by the Draft Regulation

The draft regulation introduces several changes that aim to make halal certification more accessible and manageable for businesses, while ensuring that halal standards are strictly maintained. Key changes include:

1. Lifetime Validity of Halal Certificates:

Halal certificates will no longer require renewal unless there are changes in the composition of materials or production processes. This marks a major shift from the previous system, where certificates were valid for four years and needed to be renewed.

1. Phasing Periods for Mandatory Halal Certification:

   • The regulation sets specific timelines for different business categories to comply with mandatory halal certification:
     • Medium- and Large-Scale Enterprises: October 17, 2019 – October 17, 2024.
     • Micro- and Small-Scale Enterprises: October 17, 2019 – October 17, 2026.
     • Foreign Products: Timelines will be determined by the Minister of Religious Affairs before October 17, 2026, based on the completion of mutual recognition agreements for halal certification.

2. Reporting Requirements for Changes in Product Composition:

   • If any modifications are made to the materials or production processes after the issuance of a halal certificate, businesses are required to report these changes to the Halal Product Assurance Agency (BPJPH). An updated certification must be obtained to reflect these changes.

3. Obligations of Business Actors Post-Certification:

   • Businesses must affix halal labels to certified products, maintain product integrity, and separate facilities for halal and non-halal products during storage, processing, and distribution.
   • Businesses must also ensure that any changes made to product composition or production processes are promptly reported to the BPJPH.

4. Application Requirements for Foreign Products:

   • Applications for halal certification of foreign products can be submitted through importers or official representatives in Indonesia. This process is subject to specific conditions, such as the absence of a halal certification body in the product’s country of origin or lack of mutual recognition agreements with the BPJPH.

Benefits of Lifetime Halal Certification for Businesses

The introduction of lifetime halal certification presents several advantages for businesses in Indonesia:

1. Reduced Compliance Costs:

   • The removal of periodic renewals eliminates the need for repeated applications, inspections, and associated costs.

2. Increased Business Stability and Market Confidence:

   • Businesses can now focus on expanding their operations and market reach without the concern of certificate expirations.

3. Support for Micro- and Small-Scale Enterprises:

   • The regulation introduces support mechanisms such as halal supervisors and assistance programs to help smaller enterprises comply with the new standards.

4. Streamlined Application Processes for Foreign Products:

   • By setting clear guidelines for foreign product certification, the regulation makes it easier for international businesses to enter the Indonesian market while ensuring compliance with local halal standards.

Strategic Considerations for Businesses

To successfully adapt to the new regulation, businesses must take proactive steps to ensure compliance and leverage the benefits of lifetime halal certification:

1. Establish Robust Compliance Systems:

Businesses should create internal compliance frameworks that monitor any changes in product composition or production processes. This includes training employees and maintaining detailed documentation.

1. Engage with Halal Supervisors and Inspectors:

Micro- and small-scale enterprises should work closely with halal supervisors to ensure they meet the necessary standards and receive guidance on maintaining compliance.

1. Prepare for Regular SJPH Inspections:

Even though renewals are no longer required, businesses should prepare for regular inspections under the Halal Product Assurance System (SJPH) every four years to demonstrate continued compliance.

1. Stay Informed of Regulatory Updates:

As the draft regulation is finalized and implemented, businesses should stay informed of any updates to ensure they are fully compliant with the latest requirements.

Conclusion

The new regulation introducing lifetime halal certification represents a significant step forward for the Indonesian halal industry. By eliminating the need for periodic renewals and simplifying the certification process, the regulation provides businesses with long-term stability and reduced compliance costs. As the Indonesian halal market continues to grow, lifetime halal certification sets a new standard that strengthens the integrity of halal products and enhances the competitiveness of Indonesian businesses on the global stage.

By adapting to this new regulatory framework, companies can better position themselves to meet consumer expectations and thrive in an increasingly dynamic and competitive market.

Ensure your business stays compliant and ahead of the competition with our expert guidance and support. Whether you’re navigating the new lifetime halal certification or need assistance in meeting industry standards, CPT Corporate is here to help.

Contact us now to streamline your halal certification and secure your place in the growing market!