October 26, 2020

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An Arabic term for “permissible,” halal is often used to describe food, which is deemed suitable according to Islamic laws. In Arabic, however, it refers to anything permissible under Islam, in contrast to “haraam,” that which is forbidden. While the term certainly applies to food, it encompasses much more than that. This includes behaviour, speech, dress, conduct, manner and dietary laws.

In terms of products for human consumption, halal not only applies to the ingredients, but also to the preparation, processing, transportation and storage of the product, in other words, the total supply chain.

And as the Muslim population grows, more and more companies are taking steps to make sure that their products are, in fact, halal. By 2030, the Muslim population is projected to reach 2.2 billion, representing more than a quarter of the world’s total population. By 2050, this figure is estimated to reach 2.6 billion or30% of the total global population. A large percentage of the Muslim population, 62.1%,is located in South Asia and Asia Pacific, including Indonesia, Pakistan, India and Bangladesh. Indonesia has the largest Muslim population in the world and has become one of the highest halal trade and investment destinations.

The driving force behind the growing demand for halal products is Indonesia, which in September 2014 passed a law on halal product certification, the first of its kind in the world. The law requires food to be labeled halal or not by 2017, followed by toiletries by 2018 and medicines by 2019. This means halal-labeled products must not contain traces of pork, alcohol or blood, and must be made on factory lines free of contamination risk, including from cleaning products.

Indonesia’s halal labelling law will affect most consumable products, including food and beverages, medicines, cosmetics, chemicals and biological products. It will also apply to functional goods that can be worn, used, utilised, imported and distributed within Indonesia. Law no. 33/2004 is the halal assurance law, which regulates the materials, processing and certification of halal products, as well as international cooperation with foreign halal certification agencies.

Previously, halal certification was not set under any secular law and was implemented by the Indonesian Islamic Clergy Council (Majelis Ulama Indonesia – “MUI”). The halal law mandates the government to establish a new agency, the Halal Product Assurance Agency (Badan Penyelenggara Jaminan Produk Halal – “BPJPH”) within three years after promulgation of the law. BPJPH will be authorised to implement halal product assurance, including but not limited to halal certification. BPJPH will also cooperate with relevant ministries and/or agencies, Halal Inspection Institution and MUI. This provision indicates the transition of halal certification from MUI to BPJPH. However, MUI still has a significant role in halal product assurance.

The law was enacted to protect the nation’s Muslim population from being exposed to non-halal products. The first regulation of the halal implementation law will cover the following points:

  1. Products that are obligated to be certified halal
  2. Location, place and processing of halal products
  3. The Halal Audit Institution (LPH)
  4. Cooperation for halal certification
  5. Monitoring and investigation function
  6. Administrative and penal sanctions

The second regulation will focus on tariffs, which will be based on industry size.

With increasing potential market and consumers’ interest in halal products, various companies are increasing their halal manufacturing capabilities.

Going halal

Photo courtesy of Croda Singapore Pte Ltd.

Croda International plc, based at Goole in East Yorkshire, is one of those companies looking to increase its halal manufacturing capabilities. According to Tim Eyre,  Croda Singapore Pte Ltd’s sales manager – lubricants, Croda has completed a comprehensive global review of its manufacturing sites to determine their feasibility of becoming halal approved.

“Since March, we’ve had three site approvals, which covers an additional ~200 products,” he said. “In the longer term, we expect more Croda sites to become certified and suitable for the supply of synthetic base fluids and additives to the lubricants industry. Currently, the interest from the lubricants industry for halal products is neutral,” he added.

SKF, a leading global supplier of bearings, seals, mechatronics, lubrication systems and services, has also released a wide range of food-grade lubricants that are NSF/H1, kosher and halal approved.

BASF, the largest chemical producer in the world, has 145 ingredients for personal and home care products, which are certified to the international halal standard HAS 23000. The entire value chain follows strict guidelines for raw material purchasing, manufacturing, filling, warehousing and transport to ensure product purity in compliance with Islamic law. BASF’s largest production facilities for personal care ingredients–Illertissen and Düsseldorf–have successfully undergone four audits for halal certification. BASF’s portfolio of halal ingredients ranges from sugar-based surfactants, pearlisers, emollients and protein derivatives for personal care applications – such as facial cleansers or baby bubble baths – to detergent and cleaning agents and raw materials for the pharmaceutical industry.

Many other multinational giants like P&G, Nestle and others are also working hard to reflect Muslim values in their brand communication, by working to attain high purity halal compliance.

Japan is also taking steps to enter the global halal market. According to the Japan External Trade Organizations (JETRO), Japanese food companies such as Ajinomoto, Asahi Beverage, Kewpie and Umakane are all expanding their product range with halal products, and some firms are also interested in entering other halal sectors such as pharmaceuticals, cosmetics and Islamic finance.

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