Tuesday, March 27, 2007

Should 'halal' certificate be compulsory?

According to some reports, the Majelis Ulama Indonesia (MUI; Indonesian Council of Ulema') is considering to issue fatwa regarding some products which halal status is in doubt. Its chair also thinks that the current law on consumer food (sic?) to be amended to make the halal certificate compulsory, not optional.

There are two issues here - first is the fatwa. I am not a theologist. But from what I know, according to the Sunni tradition, fatwas are non-binding. Therefore, I will respect such fatwa just as guiding principles. But whether or not I would consume the products listed in the fatwa, if it were to be issued, that would be my personal discretion.

Second, the more problematic one, is the proposal for a compulsory halal certificate. Let's for a while forget the halal part of the phrase, and focus on the certificate. Why do we need certificates or labels on any products? Sure, the answer is to protect the consumers by providing necessary information. License for chefs means we can be assured that our meals in the restaurant are made by Certificate on airline safety helps the consumers distinguish which airlines has met the certain standard. Certificate on genuine software product helps consumers know that a software is pirated. Green certificate helps consumers who are aware on environmental degradation avoid furnitures assembled using illegal logs.

(At least that works theory. In pratice it may nor work as expected. Similarly, the consumers may not care. But that's another issue. On the other hand, Aco may have different opinion - price is enough to create the necessary certificate).

But certification can (and will) also increase production cost. On the darker side, it can (and will) create the room for rent-seeking activities. Also, instead of giving protection for certification may in fact be the protection device for uncompetitive producers. Think about local producers who screamed that the second hand electronic goods imported from China are illegal, hence they need to be certified.

Now, back to the laptop... I mean, the halal certificate. What use of such certificate? Well, to protect the Muslim consumers (to be precise: those who care) from consuming non-halal food. Fine. It works so far, in the sense that it helps the consumers who care, it does not matter for those who don't, the cost is not significant for producers. And it is not compulsory, meaning that if you want to target Muslim customers, you'd want to invest on such label. If you don't, or you don't think your customers don't care, then you can skip the process.

However, making the certificate complusory is problematic. It won't matter for big producers (like Indofood). But it will matter for small and medium producers because they should bear additional costs for getting the certificate, while the benefit for the may not be significant. As this guy argues, SMEs in small, remote cities will be mostly hit as they may need to 'invite' the MUI officials, provide transports and accommodation etc.

Hence, can we find a way to be religious (if one wants to) without sacrificing efficiency? There is one thing: don't make such certificate compulsory, and leave the religious way of life as a personal choice. We don't need the state to nanny us. In Australia, the Islamic Council periodically issues a list of products that may be consummable by Muslims. The list includes some toothpaste, marshmallow, baking powder, and the addresses of butchers selling halal meat. And it works.


  1. As long as bintang beer and those delish Chinese bbq pork get the compulsory halal mark I don't have a problem with the proposed certificate law.

  2. Halal label is only the peripheral issue to make clear that some grey products are actually halal. The core issue in my opinion is that how to make clear that some people are genuinely Muslims.

    Anyway, any religious mission needs funding.

  3. It shouldn't be compulsory. If MUI's intention is truly to protect customers, they even should provide the certification for free.

    The added cost you brought up may breakeven if volume goes up. Or increase price, which may cause customers move to cheaper options. Making being certified a less attractive option. Then no one wants to get certified...

  4. Yes, it shouldn't be compulsory. Certification process couldn't be free since it requires some processes/procedures which incur cost. MUI may collect fee for this certification.

    It is producer's decision to certified or non-certified their products. It then reflected in price then consumer are free to make decision to buy halal certified or non-certified food.

  5. It takes a lot of money to get a halal certificate. Not only for entertaining MUI people from different departments (take them abroad to visit the plant/HQ)but also bribing them. There is no difference in motives between MUI issuing halal certificate and Ari Sigit issuing alcohol sticker in Suharto era....only money..money..money.