As the country with the largest Muslim population in the world, coupled with its growing middle class, Indonesia has great potential to become a major hub in the international halal market.

The government issued a law to regulate halal products in 2014 to support the halal market, but it is still ineffective because a number of regulations to implement the law have not been issued.

Halal Law No. 33/2014 specifically requires all consumable products, such as food, beverages, drugs, cosmetics, chemical products, biological products, genetically engineered products, or any other goods that can be used by humans, distributed and traded within Indonesia, to get halal certification by Oct. 17, 2019.

The law mandates that the government establish the Halal Certification Agency (BPJPH) no later three years after the enactment of the law and issue implementing regulations two years after the enactment of the law.

The BPJPH was set up in October 2017 to oversee the halal certification process, which was previously handled solely by the Indonesian Ulema Council (MUI). However, none of the implementing regulations had been issued until now. According to the law, the regulations should have been issued in mid-October 2018 at the latest.

According to the Religious Affairs Ministry, the implementing regulations are still in the finalization stage, awaiting initial approval from other relevant ministries. The absence of implementing regulations has raised some questions on the government’s seriousness in enforcing the Halal Law.

One of the questions is related to the existence of the Halal Inspection Agency (LPH), which has the right to issue or extend the halal certification before and after 2019. Based on the law, companies are required to apply for halal certification through the BPJPH.

Without the implementing regulations, businesses will be left in confusion and will assume that there is no body that is able to issue the certificates. However, it is worth noting to the business players that, as the law is not yet effective, the MUI still holds the right to issue halal certificates in Indonesia.

The second question is related to the definition of the products in Article 1 of the law. Business players are questioning whether the phrase “or any goods that can be used and applied by humans” might also include non-food and non-beverage products and services, such as medical devices. Pharmaceutical manufacturers have also asked if the Halal Law will be applied to the end products only or to the raw materials as well. When the law applies to the raw materials, many manufacturers should also get halal certification prior to the importation of raw materials.

The third question is whether non-halal products are prohibited from entering or being traded in Indonesia. The contradiction between Article 4 of the law, which stipulates that “products that enter or are distributed or traded in Indonesia must be certified as halal”, and Article 26, which allows for the entry and distribution of non-halal products provided that they bear non-halal information on their labels, has generated some confusion among business players.

Articles 4 and 26 of the Halal Law both imply that halal and non-halal labels are mandatory after October 2019. According to the Religious Affairs Ministry, non-halal products are still allowed to be marketed in Indonesia as long as the products have a non-halal label.

Fourth, the Halal Law gives an opportunity for the government and any communities to establish an LPH, which was previously monopolized solely by the MUI. One of the requirements for the establishment of the LPH is to have a halal auditor that has been certified by the MUI. To date, the BPJPH and MUI have still not set up accreditation standards for the LPH and certification for halal auditors.

The limited number of halal auditors and the LPH raises another question regarding whether there will be a phased implementation of the Halal Law for certain product categories beyond 2019. Previously, the government agreed to impose a phased implementation for the Halal Law due to difficulties in preparing all industries and the BPJPH’s readiness. The idea was rejected, as it would overrule the law. Thus, the Halal Law will go fully into effect in October 2019.

Last but not least, there is an issue related to international trade, especially with imported products. Previously, halal certification was conducted by producers voluntarily. Based on the Halal Law, however, halal certification became mandatory for both local and imported products.

The policy can be perceived as a discriminatory action regarding export-import implementation in Indonesia. As a member country of the World Trade Organization (WTO), the Indonesian government has to obey the Technical Barrier to Trade (TBT) Agreement. As such, Indonesia is not allowed to create any regulation that violates the TBT Agreement. In 2016, Brazil challenged Indonesia’s halal certification policy and filed a complaint against Indonesia to the WTO. Ultimately, Brazil won the dispute against Indonesia, as the ban imposed by Indonesia against Brazil was considered to violate WTO deals and agreements.

Based on the aforementioned discussion, the government is required to speed up the issuance of implementing regulations to overcome the aforementioned issues so that the government will not lose the opportunity to establish Indonesia as an international halal hub and to realize its noble intention to protect Muslim consumers.

Objectively, Muslim consumers are the main beneficiaries of the Halal Law, as it serves as a step toward implementing sharia principles into positive law. It truly projects the state’s role and presence in providing services, protection and guarantees to all Indonesian people, including the Muslim society as a major population in the country.

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The writer is director of the Islamic business undergraduate program, School of Economics and Business, University of Indonesia.