Indonesia’s BPJPH partners with LPPOM-MUI to accelerate free halal certification for small businesses
JAKARTA – Indonesia’s government is making available free halal certification for micro and small enterprises that have been hard hit by the economic slowdown caused by the COVID-19 pandemic, Mastuki, the Acting Chairperson of the Ministry of Religious Affairs’ Halal Product Guarantee Agency (BPJPH), told Salaam Gateway.
MSEs are entitled to free halal certification according to the omnibus law on job creation UU 11/ 2020 and government regulation number 39/2021. These businesses are not obliged to apply for halal certification and can instead self-declare their status. They are strongly encouraged to obtain halal certification to improve their competitiveness not only domestically but also in the global market, said Mastuki.
“In October last year, we signed a memorandum of understanding with more than 11 institutions including LPPOM-MUI to accelerate free halal certification for MSEs,” Mastuki said.
“We targeted 3,283 MSEs at that time that will get financing for inspection by halal auditor institutions and assessment for fatwa by MUI.”
Halal certification for all products that are halal became mandatory in Indonesia from October 2019. They are phased in by stages for the different sectors, such as food and beverages, pharmaceuticals, and cosmetics.
BPJPH has the final say to approve certification but works with external auditors, such as LPPOM, and fatwa body MUI, as part of the halal certification process.
MSEs play a significant role in driving Indonesia’s economy. Out of a total of around 64 million micro, small and medium enterprises, 98.74% are micro, 1.15% are small and 0.1% are medium-sized.
LPPOM-MUI alone will select more than 1,631 MSEs for free halal certification during the month of Shawal, Muti Arintawati, its executive director told Salaam Gateway.
The program includes technical assistance that introduces LPPOM’s in-house online halal certification system CEROL-SS23000 to help both MSEs and corporates conduct halal certification during the ongoing physical restrictions.
Other halal auditors, including ITS, are also facilitating free halal certificate registrations for MSEs around Surabaya, Gresik, and Sidoarjo.
BPJPH is also working with the Ministry of Cooperatives and SMEs and the Ministry of Investment to finance small businesses registering online for halal certification.
The halal authority also worked with ride hailing tech firm Grab to facilitate free halal certification for MSEs using the company’s GrabMart, GrabFood and GrabKios.
GLOBAL COMPETITIVENESS
The ultimate goal of the free halal certification exercise is to take local MSEs to the global market, said LPPOM-MUI’s Muti.
MUI has adjusted the validity period of its halal decree from two years to four years to ease the burden on small businesses.
“For global markets such as UAE and other countries that are recognized by the Emirates Authority for Standardization and Metrology, our halal decree will be valid for three years,” said Muti.
Afdhal Aliasar, Halal Product Industry Director at the National Committee for Islamic Economy and Finance, KNEKS, believes halal certification is inevitable as halal itself is already a global trend.
“Halal certification is needed since the complexity of global production and distribution chains can’t easily give consumers guarantee of halal products,” Afdhal told Salaam Gateway.
Key Islamic markets such as Saudi Arabia and the UAE are also expanding mandatory halal certification for more categories of food and beverages, said the director.
“We need to maintain our competitiveness, including maintaining the price of our halal products. The massive free halal certification program for MSEs, I believe, will cut production costs and even with good halal traceability, the process of halal certification in the future will be more convenient,” he told Salaam Gateway.
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