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layers in food and beverage manufacturing, one of the fastest-growing industries in Indonesia, have expressed concern over mandatory halal certification that will be applied across sectors and goods next year, claiming that the policy would disrupt businesses.

Their concerns emerged following the issuance of Law No. 33/2014 on halal product guarantee, which was signed by former president Susilo Bambang Yudhoyono. It stipulates that all businesses in the food and beverage, medicine, chemical product, biological product and genetically modified product sectors should sign up for halal certification.

Following the issuance, all the aforementioned industries have to complete their certification process within five years after the law was issued, meaning that they have less than 11 months left to be certified.

Rachmat Hidayat, the vice chairman for public policy at the Indonesian Food and Beverage Producers Association (GAPMMI), said on Tuesday that the government should take into account the fact that there were over 3.5 million food and beverage producers in Indonesia, many of whom were small and medium enterprises (SME), that have been queuing for months to obtain the halal certificate.

“These SMEs are burdened by the cost of the certification that they have to pay themselves, even though the government is the one who mandated it,” Rachmat said.

He questioned why the certification law was imposed without exception on all industries, regardless of whether they were looking to claim their products as being halal and Muslim-friendly or not.

“That makes this halal certificate a license to operate, which means that people who do not have it are not allowed to do business,” Rachmat said. “Then, only bigger companies that can afford the certification can run their business because smaller manufacturers will not be able to market their products.”

He added that the idea of applying the certification without exceptions could actually defy the intended purpose of the law itself, which was to boost Indonesia’s presence on the global halal supply chain map by offering more halal products.

“Foreign [food and beverage] companies that enter Indonesia are ready and able to afford the certification, whereas it is not always the case for local SMEs [...] this could lead to asymmetrical competition,” said Rachmat.

The Indonesian Ulema Council’s (MUI) Assessment Institute for Food, Drugs and Cosmetics (LPPOM MUI) introduced an online halal certification service (CEROL-SS23000) in 2012.

According to the council, as of Dec. 18, the CEROL-SS23000 had issued almost 50,000 halal certificates to 46,217 companies from Indonesia and 47 other countries for 527,571 products.

The council claims that the efficiency of the certification process has also improved because now it only takes 41 business days to obtain a certification, compared to 79 last year.

The 2014 law on halal product guarantee mandates that the government establish a Halal Certification Agency (BPJPH) no later than three years after the enactment of the law and issue implementing regulations two years after its enactment.

The BPJPH was set up in October last year to oversee the halal certification process, which was previously handled solely by the 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 this year at the latest.

Despite the problems, National Development Planning Agency (Bappenas) head Bambang Brodjonegoro said the government remained optimistic about the prospect of a halal industry, adding that his office would issue a national master plan as a reference to boost the competitiveness of Indonesian halal products.

As a Muslim-majority country, Indonesia makes up around 10 percent of global halal product consumers, which reached 1.8 billion last year and is expected to grow to 2.2 billion in 2030.

Bappenas cited data showing that the annual global consumption of halal food reached US$817 billion last year, with $170 billion of it coming from Indonesia.

However, Indonesia was not even included as the top five halal product exporters, even in simpler sectors like food and cosmetics, compared to countries like Brazil, which is the largest poultry exporter to the Middle East, and Australia, the world’s biggest halal beef producer.

“The halal industry has actually been trending among Indonesian manufacturers but because we [the government] have never really prepared a strategy nor encouraged them, we end up becoming net importers [of halal products] instead,” Bambang said. “With more attention through this master plan, we hope to remedy it soon.”