NO&T Asia Legal Review
Indonesia, the fourth largest nation in the world by population, is a Muslim majority country; Muslims in Indonesia account for nearly 90% of its 280 million population, making it the country with the world’s largest Muslim population per capita. In today’s interconnected world, it is widely known that under Islamic law, among other things, consumption of pork or alcohol is deemed a strict taboo. If you have traveled in Southeast Asian countries, you may be familiar with illustrations of a small pig beside items on a restaurant menu, or a “HALAL” certification symbol printed on food or beverage packaging sold in supermarkets. The pig icon is a cautionary indication that the meal contains pork or pork derivatives such as lard or gelatin, while the halal certificate ensures that no such substances are included in the marked product. “Halal” is an Arabic term meaning legitimate or lawful under Islamic law. Things that are not halal are called “haram” or non-halal. Although the concept of halal is common in the Islamic world, the halal certificate itself is issued and granted by the national government or Islamic body in each country. In principle, business operators that intend to export halal goods to another country need to obtain the halal certificate of the destination country if they wish to sell the goods as halal there.
In Indonesia, where Islamic law is not directly applied as a national law, there had been no legislation concerning halal certification until the enactment and promulgation of Law No. 33 of 2014 on Halal Product Assurance (the “Halal Law”) in 2014. Prior to this legislation, Majelis Ulama Indonesia (MUI) or the Indonesian Ulema Council, which is composed of top Indonesian Islamic scholars, had the role of authorizing halal certificates in the country, and businesses were not legally required to affix the halal certificate to their products.
Under the Halal Law, Badan Penyelenggara Jaminan Produk Halal (BPJPH) or the Halal Product Assurance Organizing Agency was organized under the supervision of the Ministry of Religion and the authorization of halal certificates was transferred to BPJPH from MUI. The Halal Law also obliged business actors to obtain the halal certificate in order to import, distribute or retail foods, beverages, medicines, cosmetics or any other product consumed by humans. That obligation was supposed to come into effect after a certain transition period.
In the face of defiance by micro and small business owners, who were hesitant about lengthy certification processes as well as additional costs, the implementation of mandatory halal certification was suspended for several years. Effective on and from October 17, 2024, however, businesses engaged in foods, beverages, butchered meat products and butchering services (such products, collectively, “F&B”) are required to affix to their F&B the halal certificate issued by BPJPH in accordance with Government Regulation No. 42 of 2024 (“GR 42/2024”), provided however that micro or small businesses and importers of F&B are exempted from such obligation for a maximum of two years, i.e. until October 17, 2026.
Notwithstanding the implementation of mandatory halal certification for F&B, trading non-halal F&B is not completely banned in Indonesia. Products containing pork, pork derivatives or alcohol, or mixed with non-halal substances in production lines, are still allowed to sell in the market if a “Non-Halal” mark is affixed to the package and non-halal F&B are displayed in such a way as to be clearly distinguished from halal products.
Under Islamic law, halal concerns not only F&B, but also relates to anything applying to the human body such as medicines, cosmetics and clothes. Accordingly, GR 42/2024 categorizes certain products which require halal certification, ranging from (i) foods, beverages, medicines and cosmetices, to (ii) chemical, biological and genetically-engineered products relating to category (i), and (iii) other products made from animal-derived ingredients. The Ministry of Religion has also published a regulation setting out a list of products which are subject to halal certification requirements.
Under GR 42/2024 the mandatory halal certification is set to be imposed in stages on product categories other than F&B, which came into effect on October 17, 2024 in relation to domestic medium and large businesses.
While domestic enterprises in the F&B sectors, with the exception of micro and small business owners, now have to address the mandatory halal certificate regime, foreign businesses exporting F&B to Indonesia are covered by the maximum 2-year grace period from the enactment of GR 42/2024. The staged implementation of the mandatory halal certification provides an additional challenge to foreign businesses aiming for the largest consumer market in the region.
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Quasi-medicines may include some nutritional drinks, shampoos and hair growth products subject to relevant regulations.
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The risk classes of medical devices are subject to relevant laws and regulations.
This newsletter is given as general information for reference purposes only and therefore does not constitute our firm’s legal advice. Any opinion stated in this newsletter is a personal view of the author(s) and not our firm’s official view. For any specific matter or legal issue, please do not rely on this newsletter but make sure to consult a legal adviser. We would be delighted to answer your questions, if any.
Rashmi Grover
Poonyisa Sornchangwat, Kwanchanok Jantakram (Co-author)
Yoichi Maekawa
Kara Quek, Kennosuke Muro (Co-author)
Rashmi Grover
Poonyisa Sornchangwat, Kwanchanok Jantakram (Co-author)
Yoichi Maekawa
Kara Quek, Kennosuke Muro (Co-author)
Yoichi Maekawa
Anastasia Jessica Maureen
Luciana Fransiska
Ario Putra Pamungkas
