Representatives from the European Union and the Indonesian Chambers of Commerce and Industry are raising concerns about Indonesia’s halal labeling — scheduled to be fully implemented by the end of 2019 — arguing it will only hamper trade and investment.
“Mandatory ‘halal’ or ‘non-halal’ labeling is not necessary – we believe it should be optional,” Phil Hogan, the European Union Commissioner for Agriculture and Rural Development, said in a speech in Jakarta.
Hogan was in the city for the sixth EU-Indonesia Business Dialogue in Jakarta.
Indonesia passed a law on halal labeling in 2014, which requires producers, distributors and importers to follow a set of procedures to secure a halal certification.
Non-halal products sold in Southeast Asia’s largest economy must be slapped on with a “haram,” or non-halal, label according to the law.
According to Islamic law, some foodstuffs and raw materials including alcohol, pork and blood are forbidden for Muslims to consume.
The halal labeling law affects a wide range of consumable products, including food and beverages, textiles, cosmetics and medicines.
This means producers must spend more time and money to make sure their products have the halal label to reassure Muslims, which make up the majority of Indonesia’s population.
Hogan said market-wise, the regulation will only be a burden for both local and foreign producers, as it will cost them more time and money to meet it.
Under the law, a government agency and the Indonesian Ulema Council (MUI) will have to supervise each stage of the production process for every product — from production to packaging, distribution and how it is served to customers.
“Kadin is currently discussing this issue with the government, along with the Indonesian Employers Association (Apindo) and the Association of Indonesian Food and Beverage Producers (GAPMMI),” Shinta Kamdani, the Indonesian Chambers of Commerce and Industry’s (Kadin) deputy chairman, said.
Shinta said small and micro enterprises will find mandatory halal labeling especially hard to bear.
There were 3.66 million small and micro enterprises in Indonesia as of 2015, according to data from the Central Statistics Agency, or the BPS.