Her concerns were not unsubstantiated. In December 2020 Malaysia uncovered a “cartel-style meat scandal” where the country’s state news agency Bernama reported importers had used fake halal logos to sell halal meat in the country. The Malay Mail said consequently charges were brought against two directors of Johor Baru-based frozen meat company Raihanah Cold Storage Sdn Bhd for falsifying halal logos on its transport vehicles as a result.

In January 2021 the Malaysian government announced a mandatory use of QR codes from March last year to authenticate imported halal meat.

Senior food safety expert with India-based consultants Top Certifier Charles Kunjumon told Salaam Gateway a QR code linked to a certificate will give the details such as name of the certification body, organisation name, certificate number, validity, labelling or certification of the food purchased.

That can tell customs teams whether overseas abattoirs and processing plants have been approved by Malaysia’s department of veterinary services (DVS) and its core halal certifying agency the department of Islamic development (JAKIM), as per Malaysian import regulations.

Khan added while “QR codes are not an anti-counterfeiting mechanism,” they could direct officials, buyers and consumers to products. These details could be copied and incorporated into a QR code.

That said, such data could be checked and QR codes made more secure, though using holograms or optically variable ink, she said adding “nothing was foolproof”.

Blockchain to the rescue?

Kunjumon said this was where blockchain technology could make a difference through its secure, immutable and decentralised ledger delivering traceability of halal labelling. Blockchain technology used a chain of blocks containing data and information.

Each block consists of three parts: data, unique ID (hash) and previous hash. These blocks were linked in a peer-to-peer network and the hash changes if the information is edited, making it difficult to tamper with the information.

He said this meant once data was stored in the blockchain (a new block is created) and other participants had agreed on these details, it was difficult to change. As a block was created, a hash was automatically added and if someone attempted to alter data within a block, the hash was automatically replaced by a new one.

This caused an error in the next block as it recorded the previous hash that could be detected.

The decentralised ledger enabled a peer-to-peer network to manage the chains with each party receiving a copy of the blockchain. Every user received notification of any changes or additions to inspect the historical data.

“The technology allows transparency of information as stakeholders can trace data recorded from farm to fork. This boosts consumers’ trust in halal products,” Kunjumon said, adding integrating QR Codes within such system aided users verify a halal certificate through the delivery of details such as a certification body, organisation name, certificate number, validity and labelling.

He said these systems had gained wide interest. South Korea’s telecommunication company KT recently announced it has developed a global traceability blockchain for halal food.

Maximising the use of digital technologies could improve the reliability of blockchain-based systems, Khan said.

Examples were using the internet of things (IoT), oracles (links between blockchain and standard data) and smart contracts to record the supply chain and product parameters at different transformation points from farm-to-fork. This would reduce halal food fraud, she said.

Challanges ahead

Nevertheless, there were challenges. Blockchain required “considerable resources” in terms of capital, knowledge, skilled personnel and targeted awareness campaigns. Hence Khan suggested halal companies gradually adopt such systems.

“These systems are important given past and current paper-based systems can be opaque and easy to manipulate. Where these are used, a dearth of real-time recording of processes, increases doubts production follows the laws from the Quran and minimal and centralised infrastructure oversight allows manipulation of halal labelling,” researchers from Oxford University and Bina Nusantara University, in Jakarta, Indonesia said in a report.

They described the process of recording information throughout the production process as “opaque, thus prone to data tampering that is difficult to trace”.

A licence to print money for fraudsters

Luqman Bin-Dawood, CEO of blockchain providers Halal Trail, based in Manchester, UK, told Salaam Gateway paper-based halal tracing systems were “a licence to print money” for fraudsters.

A large-scale survey of halal-certified food products randomly collected from markets in Thailand in 2019 saw 4,829 food samples from 10 food groups tested in a laboratory for four potentially haram substances: porcine DNA, porcine fatty acids, ethanol, and hydroxyproline (gelatin).

The tests indicated 62 (1.3%) had positive results for traces of one or more of these ingredients.

Peter Hall, a consultant with Halal Trail, highlighted the vulnerabilities at slaughterhouses regarding halal monitoring and record keeping. A slaughterhouse might falsely label a vet-certified sick animal as healthy, misleading supply chain participants. However, if a farmer or a vet had been honest and logged the problem, this fraud by a slaughterhouse would be picked up via a blockchain system.

He said this underscored the value of blockchain within lengthy supply chains covered by halal certification processes.

Professor Dr Marco Tieman, CEO of LBB International, a Netherlands and Malaysia-based supply chain strategy consulting and research company, stressed blockchain ledger technology could help with auditing.

“Blockchain can isolate problems regarding product recalls or halal standards for certification and can give quick answers about the halal status of products or processes,” he told Salaam Gateway.

He said companies have lost millions of dollars in lost sales globally through such problems. Halal cases were noticed in Muslim countries through internet-based media and Muslims may boycott products associated with halal fraud. Corporate reputations, he said, could be protected by blockchain technology.

Tieman said blockchain would become more widespread as the halal sector matured, moving from basic product-led companies to established supply chains and groups of companies looking to develop a sophisticated value chain approach.

He told Salaam Gateway leading halal companies in Malaysia, Indonesia, Turkey, United Arab Emirates (UAE) and Saudi Arabia were moving towards a supply and value chain approach; addressing areas such as halal branding, Islamic finance and more within 10 years.

“The beauty of blockchain is you can transform from the product approach to a supply chain and value chain approach to meet new requirements,” he said.

Naturally, for such developments to bed in, tighter controls on land crossings, seaports and airports involved in halal transportation logistics were needed. Tieman said the International Maritime Organisation (IMO) and International Air Transport Association (IATA) had yet to develop specific codes relating to halal freight, meaning certified products could be mixed with haram goods, potentially invalidating their strict halal status.

"There's a need for standards there," he told Salaam Gateway, stressing how blocks on a distributed ledger system could verify if halal procedures had been followed at distinct stages throughout the supply chain.

The same was true, he said, for e-commerce distributors who may offer halal goods, but failed to install appropriate halal logistics standards. Ultimately, a consensus was emerging that – as researchers from the Italian universities of Bari Aldo Moro, Turin and Foggi had said – the implementation of blockchain technology was “an instrument to increase the trustworthiness and traceability of halal foods”.

© SalaamGateway.com 2022. All Rights Reserved

The military action, that on 17 April the United Nations (UN) Office of the High Commissioner said had killed 2,072 civilians, has put the Middle East and North Africa in a tight position over food supplies. This comes on top of the region's economies having been weakened by the COVID-19 global pandemic.

Dutch government figures reflect Russia produced 85.8 million tonnes of wheat in 2020, while news agency Reuters credits Ukraine with producing 24.9 million tonnes. With imports accounting for as much as 90% of food consumption, the Gulf Cooperation Council (GCC) region has been impacted by a steep reduction in grain and sunflower seed exports from Russia and Ukraine and freight rates inflated by the war.

“Supply chains have been interrupted and food prices have risen sharply due to the Gulf’s extensive reliance on Russian and Ukrainian staple foods,” said Matthew Hoffer, managing director of Europe and Middle East at OneAgrix, a global agricultural and halal digital trade platform.

“This is particularly so for wheat, corn, sunflower seed oil and barley, in some cases accounting for as much as 50% of imports. This scarcity has escalated costs and thereby prices (causing food inflation),” he said.

UN Food and Agriculture Organisation (FAO) data shows Saudi Arabia and Oman import around half of their wheat from Russia and Ukraine. Russia is also the United Arab Emirates’ (UAE) largest wheat supplier with a 50% market share, according to the United States Department of Agriculture (USDA).

Moreover, 73% of sunflower oil in the UAE was imported from Ukraine and 7% from Russia in 2019, according to the World Trade Organisation (WTO).

“The GCC imports as much as 90% of all food, so any disruption obviously has a knock-on effect,” said Hoffer, while adding the GCC states were protected by a diversified supply chain and their wealth, itself been sunk into more local production and food storage.

COVID-19 supply problems have also encouraged contingency planning – the UAE approved a new federal strategic food reserve law in 2020 to maintain crisis supplies. To protect consumers from food price hikes stemming from the Ukraine invasion, the UAE approved a new policy in April 2022 telling suppliers to submit evidence to justify price increases of goods including bread and rice.

The region has also sourced more sugar, wheat and barley from Latin America, particularly Brazil. Meanwhile, Gulf countries have increased payments to other Middle East and North African countries, such as Egypt and Algeria, to help them counter inflation.

“In return, these countries have stopped exporting to existing countries and diverted commodities such as grains, cooking oil and oilseeds to the Gulf,” said Hoffer.

That assistance will be welcome in North Africa, where even relatively wealthy Tunisia faces significant disruption of supplies as Russian tanks roll over Ukraine’s rich farmland. Sigma Conseil, a Tunisian statistical and polling organisation confirmed on 14 April that, with Tunisia importing more than 66% of its cereals, 61% of its durum wheat, 97% of its soft wheat and 98% of its barley, the risk of disruption is real. Most of Tunisia’s cereal imports come from Ukraine, particularly soft wheat.

According to data service Trading Economics, $151.96 million’s worth of wheat (and meslin); $89.9 million’s worth of corn and $62.1 million’s worth of barley was imported into Tunisia from Ukraine in 2021. 

Ukraine has been struggling to export 20 million tonnes of wheat and corn harvested in 2021 due to Russian navy blockades on the Black Sea according to the Ukrainian Grain Association.

Consequently, Mohamed Sadok Jebnoun, a Tunisian economist, said the invasion would reduce availability and increase prices.

He told Salaam Gateway the Russo-Ukrainian war had started while the world was still recovering from the economic aftermath of COVID-19. Governments were expecting to tackle post-pandemic recovery, but this process had stopped in light of the supply chain crisis and massive rise in raw material prices caused by the war.

“The war directly affected the price of cereals and barley has reached $500 per tonne,” said Jebnoun.

While the Tunisian ministry of agriculture, water resources and fisheries has confirmed the country is cushioned by having a three-month stock of wheat, other African countries are less well prepared.

Africa feels the brunt of rising prices

“The African continent has been the most affected and harmed by the COVID-19 pandemic and now by the Russia-Ukraine war,” he said.

Jebnoun predicted Africa’s collective public debt would rise by at least $300 billion because of the war and the pandemic in addition to the previously planned debts in the African countries’ budgets.

“Ukraine is a main exporter of wheat, cereals, sunflower oils and other food products to Africa… We can say Tunisia has average harm following this war, while other countries have harsher effects, such as the Sahel and Sahara Desert countries,” he predicted, indicating key food importers Egypt and Algeria would also suffer.

“The worst scenario is that importing countries will be left with no stock for next summer,” said Algerian economist Mourad Kouachi of the University of Oum El Bouaghi. He told Salaam Gateway the worst would come if the conflict continued through the Ukrainian harvest season as that would translate into famine for many poor countries.

Jebnoun said seeking alternative wheat supplies further afield – such as India, Australia and Argentina – may not be a solution given the current high shipping costs now running around 200% of pre-pandemic levels.

“The African Development Bank has been urging cereals self-sufficiency on African countries, but that will take time.”

Will price rises cause unrest and a new Arab Spring?

The Tunisian economist thinks not.

“The real problem today is an economic and social one that aims to fight poverty and boost the economic situation. The priority should go to the economic and social situation; the only revolution people should think about today is the technological one,” Jebnoun said.

The impact on the food trade with key halal markets in south-east Asia – Indonesia and Malaysia – will be less important, although still significant. In March, Wellian Wiranto, a senior economist for the Singapore-based OCBC Bank told Malaysian journalists Malaysian exports only comprised 0.33% of the country’s outward shipments in 2021.

Imports of Russian goods comprised 0.5% of Malaysian imports. However, Ukraine wheat imports have been important with Malaysia importing $72.3 million’s worth of wheat from Ukraine in 2020, according to the Observatory of Economic Complexity (OEC), a US-based economic data service.

Indonesia is even more reliant on Ukrainian wheat supplies. According to US-funded south-east Asian news service Benar News, in 2020 Ukraine exported $708 million’s worth of cereals to Indonesia and last year the country imported 3.07 million tonnes of wheat from Ukraine and 2,955 tonnes from Russia, according to the Asian Financial Review.

With Ukraine’s major farm industry seriously disrupted by the war, Indonesia may need to look to alternatives. This could include Australia, from which it imported 4.6 million tonnes of wheat in 2021, and potentially Russia as Indonesia refused to impose sanctions despite voting to condemn its invasion of Ukraine at the UN General Assembly.

In March, as its armed forces penetrated the territory of its neighbour, Russia’s ambassador to Indonesia Lyudmila Vorobieva stressed the country had improved its production capacity since 2014 and claimed its production was competitive with Australia.

“We are not only prepared to supply wheat, but we are ready to supply beef or chicken to Indonesia,” she said.

© SalaamGateway.com 2022. All Rights Reserved

In Malaysia, a cartel was accused in December 2020 by anonymous whistle-blowers speaking to Malay-language daily Sinar Harian of allegedly bribing customs officials for 40 years to import frozen meat (including kangaroo and horse meat, although these claims were subsequently played down by the Malaysian government) from China, Ukraine, Brazil and Argentina. It was declared as halal but was not slaughtered according to Islamic customs or sourced from approved stakeholders before being repackaged as halal beef. Three executives of Syarikat LY Frozen Food Sdn Bhd, the company implicated in alleged fraud, were subsequently charged with money laundering offences and violations of trade descriptions legislation. The trial continues and an arrest warrant has been issued for a fourth executive, who remains at large.

Other high profile examples have included the conviction in 2015 of the owner of a US-based meat exporter, Midamar, found guilty of fraudulently misrepresenting beef sold to Malaysia and Indonesia as halal. In Australia, whistle-blowing reports of abattoirs revealed exploitation of workers and failure to follow halal practices for poultry and other meat destined for Malaysia.

Rising demand equals more scams

According to the UK-based Halal Monitoring Committee (HMC), practices such as mislabelling and contamination have increased with growing consumption of halal products. The certification organisation was established in 2003 to uphold standards for halal food produced and sold in the UK

"There are a lot of imported products in the UK that come in from the global supply chain, the majority of which are from non-majority Muslim countries. Nobody has visibility on those products and whether they conform to the UK Muslim community's expectations," said Nadeem Adam, HMC operations director. 

Because demand for halal products outstrips supply, and because halal meat is more expensive than non-halal (due to labour, inspection and certification costs), unscrupulous suppliers have the opportunity to introduce haram products into the halal supply chain, Adam said. 

Other contributors to the problem, according to Ali Abdallah, independent scientist and halal fraud expert based in Bari, Italy, are the "multiplicity of halal standards, (and) disagreements between halal certification (and accreditation) bodies" about what constitutes halal.

This means a product that has been produced to halal standards in one country may not be considered halal by a different country. And while "these circumstances are more about consumer expectations than actual fraud," explained Adam, the grey areas they create can be exploited by scammers.

Fraud issues in the USA and UK

In the USA, where there is no federal regulation of halal food production, the certification process is performed by third-party certifiers based on differing requirements and their own interpretations of religious tenets, said Melissa McKendree, assistant professor at the Department of Agricultural, Food and Resource Economics (AFRE) at Michigan State University. McKendree is supervising a research project supported by the US Department of Agriculture (USDA) to help the US meat industry improve halal certification and pinpoint potential anti-fraud solutions.

In the UK, much of suspected fraud occurs at the point of slaughter. HMC does not endorse any form of stunning (where the animal is rendered unconscious, by electric shock or other methods, before it is killed) as part of the slaughter process. However, HMC believes meat produced using various stunning (as well as non-halal compliant non-stunning) methods are being labelled and sold as halal in the UK.

Other non-halal practices occur further down the supply chain. In recent years, there have been reports from across the world of traces of pork DNA reportedly being found in meat (and even confectionary) products labelled as halal. Meanwhile, analysis of halal-marked poultry products has shown the water used in “pumping-up” chickens contains proteins of porcine origin.

HMC attempts to combat fraud by only certifying products that meet its halal standards. It uses a patented certification mark, distinct from the generic halal 'logo' (the word ‘halal’ written in Arabic and presented as a symbol), that its more than 1,000 member shops, butchers and takeaways display as a sign to consumers that their products conform to HMC's ‘farm to fork’ halal criteria.

But while such measures may help consumers make informed decisions about what to buy, they do little to tackle malpractice.

Challenges to curbing fraud

A major barrier to stamping out fraud is the difficulty of enforcing halal standards.  The problem arises in non-majority Muslim countries like the US, where the sector is not legally regulated and halal and non-halal supply chains have many opportunities to merge, according to Kelsey Hopkins, who is leading the AFRE research project into halal meat production. 

HMC similarly admits that in the UK, where halal meat makes up approximately 7% (according to HMC estimates) of the country’s combined beef, lamb and chicken supply, it does not have the power to take action when there is suspected crossover with the overwhelming majority of non-halal meat.

"The UK does not have a halal standard, so if somebody suspected that a store was selling something that was not halal-compliant, there is very little we can do," Adam said. 

In countries without halal food regulations, the industry usually has to rely on other consumer protection and trading standards legislation to prosecute anyone suspected of fraud or misrepresentation. "EU countries actually contain all the instruments required to resolve most of these problems," said Abdallah. He also notes the existence of "ethical/moral fraud," where products which do not require halal certification, such as olive oil, are labelled halal to take advantage of gullible consumers. This is different from "legal fraud" where a product is misrepresented, he said.

But legal halal food fraud is extremely difficult to detect, due to the challenge of testing products and inspecting practices at every stage of intricate and increasingly international supply chains.

Fraud issues in Muslim majority countries

Even in Muslim majority countries, where the halal food sector is typically regulated and governments have powers to take enforcement measures against fraudulent producers and retailers, fraud is still a major issue.

In Malaysia, responsibility for halal certification is governed by the Halal Hub Division, a special department set up by the Department of Islamic Development Malaysia (JAKIM). It is an offence in Malaysia to label products as halal without authorisation from JAKIM, and accredited enforcement agencies are authorised to suspend or revoke business licences of those who misuse or falsify halal certifications. Those found to have breached the rules may be prosecuted.

But the recent revelations about a long standing fraud cartel shows that regulations are only as good as their implementation. Media reports at the time the scandal was discovered linked JAKIM officials to the corrupt practices (although this was denied by the authority) and Abdallah cites the "weakness of the authorities in ensuring the integrity of halal certification, and involvement with politics and religion" as factors undermining the successful policing of halal food standards. 

In recognition of the difficulty of policing halal food standards in a globalised world, efforts have been made to internationalise standards.

Harmonising standards

According to Abdallah, the international halal standard involving the greatest number of Muslim countries (57 in total, with a combined population of 1.6 billion) is the OIC/SMIIC 1:2011, containing the general guidelines on halal food. The SMIIC standard is a joint initiative between the Saudi Arabia-based Organisation of Islamic Cooperation (OIC) countries and the Turkey-headquartered Standards and Metrology Institute for the Islamic Countries (SMIIC).

In May 2011, this standard defined the basic requirements at any stage of the food chain, such as receiving, preparation, labelling, processing, packaging control, transport, distribution, storage and service of halal food based on Sharia rules.

Other attempts to harmonise the halal market include the efforts of the World Halal Food Council (WHFC) and the International Halal Accreditation Forum (IHAF).

Technology to the rescue?

To support these standards, technology is increasingly seen as the key to detecting and stamping out halal food fraud.

Following the December 2020 cartel scandal, Malaysia's JAKIM announced plans to improve the recognition of foreign halal certification bodies by adding on-pack QR codes and digitising halal certificates to reduce the risk of duplication.

A team at China's Sichuan University is evaluating a DNA sequencing technology known as clustered regularly interspaced short palindromic repeats (CRISPR) to replace unreliable protein testing and expensive quantitative polymerase chain reaction (qPCR) DNA testing in food authentication.

Elsewhere, researchers at Thailand’s Chulalongkorn University's Halal Science Centre have developed a chromatography-based strip test that can detect DNA from forbidden meats.

In the Netherlands, researchers at Wageningen University & Research and a separate team at Iran's Islamic Azad University Tehran Science and Research Branch are investigating the possibility of using infra-red technology, which can be deployed using hand-held devices, to check meat. Also, food supply chain technology specialists, such as Singapore-based digital B2B platform OneAgrix, are introducing blockchain solutions to track meat from slaughter to the point-of-sale to the consumer.

With the mounting purchasing power of younger, larger generations of Muslim consumers, and growing competition between retailers, from supermarkets to fast food services, more attention is being paid to what influences consumer choice in the halal food sector.

One of the aims of the AFRE project at Michigan State University is to establish whether demand to know the provenance of halal products is strong enough to warrant additional investment in fraud prevention. 

"This project can help supply chain members deduce if consumer willingness to pay for halal certified foods outweighs the potential costs of adopting new traceability and verification technology to ensure proper certification,” said Hopkins.

For HMC, the issue is to do with education and awareness, rather than any question over the willingness of consumers to pay for genuine halal products. "From a consumer perspective, it's about a journey," Adam said, pointing to a July 2020 study by the UK's Bristol University that surveyed the buying behaviours of 250 Muslims and found that 70% of those questioned preferred to buy non-stunned meat. 

"When people start to think about this issue, they do some research and want to learn more about how to choose genuine halal products. We get calls from people who want to understand what the risks are, what to look out for and how to make choices that meet their expectations," he said.

© SalaamGateway.com 2021 All Rights Reserved