Indonesia regulatory body under scrutiny

By Lucy Whitehouse contact

- Last updated on GMT

Indonesia regulatory body under scrutiny

Related tags: Asean, Islam

The Indonesian Ulema Council (MUI), the sole organisation responsible for the accreditation of halal products and brands in Indonesia, has come under fire for not revealing its financial reports.

The Central Information Commission in the country has called the regulatory body, which is partly publicly-funded, to reveal transparently how the state money it receives is spent.

The MUI issues halal accreditation for companies and products across cosmetics, personal care, pharmaceuticals, food and fashion.

Although not a governmental department, the MUI’s status as a public body means it should declare more clearly its operations in the country, the Commission has asserted, particularly as it is now increasing its operations, through extending its certification into more sectors.

Rising halal

Halal accreditation is becoming an increasingly hot topic across the ASEAN region and beyond, as demand for halal certified products continues to grow across most FMCG industries.

According to market researchers, the halal sector is set to record a global annual growth rate (CAGR) of just under 10% through to 2020, and is set to reach US $2.47bn in Asia alone.

Although halal products have been in demand from Muslim-majority countries for many years, the trend is now spreading to non-Muslim majority countries in the region too, such as Thailand, Australia and New Zealand, as the spending power of Muslims there develops and the countries look to equip themselves for properly accredited exports.

Case study

The Philippines, for example, is one of the latest in the region to turn its attention to the rising potential of the market, and recently introduced several new bills to facilitate domestic halal accreditation.

Senen M. Perlada, director of the Department of Trade and Industry in the country, explained that for non-Muslim majority countries, the increasing power of halal exports in sectors like cosmetics and fashion means that they can’t afford to miss out on a robust system of accreditation.

We have to be together when it comes to exports, otherwise, it will be hard to penetrate other markets if we are not clear about the procedures and the proper authorities concerned​,” Perlada confirmed.

Indonesia’s moves to bolster halal align with this, and the scrutiny of the MUI body suggests the issue is at the forefront of the manufacturing and retail agenda in the country.

Related topics: Regulation & Safety, South East Asia

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