After a delay of almost five years, an essential implementing regulation has finally been issued for the Halal Products Law. The new regulation (Government Regulation No. 31 of 2019 / “GR 31/2019”), entered into force on 3 May 2019.
GR 31/2019 contains no material changes from the draft that we analyzed in our ABNR Legal Update titled Mandatory Halal Certification in Indonesia: Government Regulation Expected to be Issued Soon, which was published on 25 February 2019
(see https://www.abnrlaw.com/news_detail.php?send_news_id=343&year=2019&month=2). Consequently, it is unnecessary to repeat our analysis here.
So the halal legislation is now operational, right? Err, wrong
For those anxious to see the Halal Products Law being put into operation quickly, the long wait is not over yet as, in accordance with Indonesia’s hierarchical system of legislation, further ministerial-level regulations will now be needed for GR 31/2019 to be put into effect, which is, of course, a prerequisite for the full implementation of the legislation.
According to senior officials of the Halal Assurance Agency (“BPJPH”) whom we talked to, it is expected that these regulations will be issued by the Minister of Religious Affairs ahead of 17 October 2019 (this date is important as Article 63 of the Halal Products Law provides that full mandatory halal certification for all prescribed products must commence within not more than five years from the date of promulgation of the legislation, i.e., five years counting from 17 October 2014). The media has also reported that the draft regulations are in the process of finalization. Nevertheless, given that the Halal Products Law also requires all of the necessary implementing regulations to have been issued within two years of its enactment, which was five years ago, it will come as little surprise if the deadline for full implementation is missed.
Mixed response to GR 31/2019
Even among those who are enthusiastically in favor of mandatory halal certification, not everyone is happy with GR 31/2019. For example, pressure group Indonesia Halal Watch (IHW) has challenged the regulation in the Supreme Court on the ground that, among other things, it dilutes the authority of the Indonesia Ulema Council (“MUI”) in halal certification matters.
As for industry players, the response to date has generally been muted, presumably because they are waiting to see what additional obligations the yet-to-be-issued ministerial regulations will impose.
Continuing legal uncertainty
Whatever one’s view of mandatory halal certification, there is little doubt that the inordinate delay in the issuance of implementing regulations for the Halal Products Law has given rise to a significant degree of legal uncertainty, given that the deadline for full implementation of the legislation is only months away.
The pharmaceutical industry finds itself in a particular difficult position. After having initially hoped that it might be accorded a blanket exemption from the mandatory halal certification regime, the industry now sees that these hopes were misplaced. While Article 74(2) of the Halal Products Law allows pharmaceutical and biological products and health devices to continue to be sold even if produced using non-halal raw materials or in a non-halal manner, the sources/origins of the raw materials must be stated (“dengan mencantumkan informasi asal bahan”). The specific rules and procedures governing this are to be set out in a presidential regulation (see Article 74(4)), which has yet to be issued. Until such time as this presidential regulation is issued, the uncertainty facing the pharmaceutical industry is set to continue.