pISSN: 2723 - 6609 e-ISSN: 2745-5254
Vol. 5, No. 7 July 2024 http://jist.publikasiindonesia.id/
Jurnal Indonesia Sosial Teknologi, Vol. 5, No. 7, July 2024 3254
Inclusion of Halal Product Provisions
Consumption in order to meet the ethics of business
competition
Dharma Setiawan Negara
1*
, Samuel Dharma Putra Nainggolan
2
, Lufsiana
3
Universitas Sunan Giri, Indonesia
1
, Universitas Airlangga, Indonesia
2
, Universitas Hang
Tuah, Indonesia
3
Email:
1*
2
*Correspondence
ABSTRACT
Keywords: halal,
products, indonesian
ulema council (MUI),
halal product assurance
agency (BPJPH).
In 2024, the Muslim population in the world in general and
in Indonesia in particular is increasing. Of course, this is also
followed by market demand for consumption products that
are guaranteed to be halal. In the past, halal certification of
products was carried out by the Indonesian Ulema Council
institution based on applicable laws and regulations.
Currently, there are improvements both in terms of
regulation and in terms of the authorized institution in
issuing halal certification for a consumer product, one of
which is the formation of the Halal Product Assurance
Agency (BPJPH) which is authorized to issue halal
certification for consumer products. This research is a
normative legal research that uses a legislative approach, and
a conceptual approach to answer legal issues and produce a
finding regarding the authorized institution in issuing halal
certification of applicable consumer products.
Introduction
The word halal itself is a term in Arabic in Islam which means "allowed" or
"allowed". Etymologically, halal means that something can be done because it is free or
not bound by prohibitive provisions (Amalia, 2013). In a broader context, the meaning of
halal means everything including behaviour, activities, ways of dressing and so on that
are allowed or permitted by Islamic law. Burhanudin said that regarding the requirements
for halal products according to Islam, they are halal in their substance, halal in the way
of obtaining them, halal in the process, halal in their storage, Dalal in their transportation
and halal in their presentation (Arsanti & Mahmud, 2023).
diverse meanings, including; leaving an activity, halal, stopping or staying (dwelling) in
a place, releasing or describing bonds or describing words, overriding (an event occurs),
obliging, determining, liberating, for example, freeing (a person) from kaffarat oath, and
Inclusion of Halal Product Provisions Consumption in order to meet the ethics of business
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Jurnal Indonesia Sosial Teknologi, Vol. 5, No. 7, July 2024 3255
others (Karina, 2019). Etymologically, this word contains the meaning of liberating,
leaving, breaking, dissolving and allowing. In Munjid, halal is interpreted as letting go of
The number of Muslim population globally in 2021 will reach 1.8 billion people
with the potential for spending on halal products to reach 2.2 trillion USD. Based on data
from the Ministry of Home Affairs of the Republic of Indonesia, the number of Muslims
in Indonesia reaches 237 million people (Rahman, Nainggolan, & Sinambela, 2023).
Indonesia is predicted by the Ministry of Industry to experience an increase in
consumption of halal products by 3.2 trillion rupiah in 2024. Based on the 2022 State of
The Global Islamic Economy (SGIE) Report, it was found that Indonesia ranked 2nd in
halal food products. This shows that halal food consumption in Indonesia has a
considerable dominance in the global Sharia market (Musataklima, 2021).
As one of the products needed by humans, food is a basic need that is the most
important. Regarding food, this has been guaranteed in the constitution Article 28C
paragraph (1) of the Constitution of the Republic of Indonesia in 1945 (Constitution of
the Republic of Indonesia in 1945), stipulating that everyone has the right to develop
themselves through the fulfilment of their basic needs, thus food is a basic need that is
part of Human Rights and the state has a constitutional obligation to realize availability,
affordability, and the fulfilment of sufficient, safe, quality and balanced nutritious food
consumption (Rahman et al., 2023). Safe food is needed to prevent biological, as well as
chemical contamination that can interfere with and harm human health and does not
contradict the religious norms, beliefs and culture of the community (Ningrum, 2022).
In the legal context in Indonesia, it is regulated in Article 1 number 5 of Law
Number 33 of 2014 concerning Halal Product Assurance (Law 33/2014) it is stated that
a halal product guarantee is the legal certainty of the halalness of a product as evidenced
by the existence of a halal certificate, while the product referred to here is goods and/or
services related to food, beverages, medicines, cosmetics, chemical products, biological
products, genetically engineered products, and consumer goods that are used, used, or
utilized by the community (Sari, 2018).
Currently, the Halal Product Assurance Agency (BPJPH) has been formed, which
is an institution authorized by the state to implement norms, standards, procedures and
criteria for Halal Product Assurance as mandated by Law 33/2014 (Aziz, 2017). This
regulation has also changed as regulated based on Law Number 6 of 2023 concerning the
Stipulation of Government Regulations instead of Law Number 2 of 2022 concerning Job
Creation into Law (Law 6/2023). Of course, in Indonesia, a country with the majority of
followers of Islam, in the circulation of consumer goods, it is mandatory to meet halal
standards for products marketed (BADZLINA, 2021).
Talking about institutions or agencies related to halal certification of a consumer
product before the enactment of Law 33/2014 which was updated through the Job
Creation Regulation which was stipulated as Law 6/2023, several institutions are
policymakers related to the halal issue of a product, namely:
Dharma Setiawan Negara, Samuel Dharma Putra Nainggolan, Lufsiana
Jurnal Indonesia Sosial Teknologi, Vol. 5, No. 7, July 2024 3256
a. Fatwa Commission of the Indonesian Ulema Council as the issuer of the halal fatwa
and the party that issues the Halal certification;
b. MUI Institute for the Assessment of Food, Drugs, and Cosmetics (LLPOM) as a
researcher on halal products from a scientific aspect;
c. the Food and Drug Supervisory Agency (BPOM) as the licensee of the halal label;
d. The Ministry of Religion is the party that makes policies, conducts socialization, and
education to the community; and
e. Other relevant ministries.
Based on Article 48 number 3 of the Job Creation Regulation which amends Article
5 paragraph (1) of Law 33/2014 states that the Government is responsible for organizing
Halal Product Guarantees. The implementation of the Halal Product Guarantee is carried
out by the Minister of Religion. Based on the implementation of the Halal Product
Guarantee from the Government, the Halal Product Assurance Agency (BPJPH) was
formed which is located under and responsible to the Minister of Religion. The BPJPH
here replaces the role of the Indonesian Ulema Council (MUI) as the holder of halal
certification authority (Harahap, 2019). Furthermore, based on Article 48 number 1 of the
Job Creation Perpu, it is stated that the Halal Inspection Agency (LPH) is an institution
that replaces the role of the MUI Food, Drugs, and Cosmetics Assessment Institute
(LPPOM MUI) which is in charge of inspecting and/or testing the halalness of a product.
Based on this, Islamic morality must be reflected in every action taken by economic
actors. Morality occupies a special position related to the teachings of Islam, because the
formation of a person who has good morals (akhlaqul karimah) is the highest goal of all
Islamic teachings. However, the reality that is happening today is that there is still a high
number of business actors who put aside ethical and moral values in doing business
(Nafis, 2019).
The regulation of the obligation to include halal certification is a revival of the halal
trend for products in Indonesia to be able to compete comparatively, especially when
competing with products that are not halal-certified. Comparative advantages that are also
the urgency of halal certification of a product can be grouped into several elements as
follows:
a. Authority, to provide legal certainty that the products and services provided are by
sharia law regarding halal and create a mechanism to monitor compliance with
guidelines and standards of raw materials and production processes;
b. Belief, to assure Muslim consumers (and other consumers who have dropped their
preference for halal products);
c. Competitive Advantage, to expand market coverage towards readiness to meet global
needs;
d. Quality, to show that their products have met halal requirements and hygiene and strict
health practice standards; and
e. International acceptance and import-export market guarantee the product or identity.
Apart from all that, the obligation to provide true and honest information on every
product produced by producers or business actors is one of the obligations regulated under
Inclusion of Halal Product Provisions Consumption in order to meet the ethics of business
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Jurnal Indonesia Sosial Teknologi, Vol. 5, No. 7, July 2024 3257
Law Number 8 of 1999 concerning Consumer Protection (Law 8/1999). One of the rights
of consumers is the right to comfort, safety and security in consuming a product of goods
and/or services, thus the urgency of halal consumption products are non-negotiable
considering the increasing number of imported packaged consumption products produced
outside Indonesia, especially in countries where the majority of the population is not
Muslim.
Halal certification and halal labelling are 2 (two) different activities, will still have
a relationship with each other. The result of the halal certification is the issuance of a halal
certificate if the product in question has met the requirements as a halal product. Halal
certification is carried out by an institution that has the authority to carry out it, the
ultimate goal of halal certification is a formal legal recognition that the products issued
have met halal provisions. Meanwhile, halal labelling is the inclusion of halal writing or
statements on product packaging to show that the product in question has the status of a
halal product.
Research Methods
This research is legal. Research means piencarian return to answer the problem of
scientific research. The research method also contains aspects including the stages of
activities carried out and research procedures.
Results and Discussion
Authority in Issuing Product Halal Certification
Based on the mandate of Law 33/2014, it is stated that in the first stage, namely
food and beverage products, must start implementing halal certification for their products,
this obligation will end on October 17, 2024. It is hoped that after that date, all food and
beverage products (consumption) must be halal certified. The obligation of halal
certification on October 17, 2024, will begin with the obligation of halal certificates for
food products, beverages, slaughter products and slaughter services, raw materials, food
additives, and auxiliary ingredients for food and beverage products.
The Halal Product Assurance Agency (BPJPH) is one of the divisions under the
Ministry of Religious Affairs. Formed based on the mandate of Law 33/2014, by
Presidential Regulation (Perpres) Number 83 of 2015 concerning the Ministry of Religion
(Perpres 83/2015) BPJH is led by a Head of Agency. The existence of BPJPH is also
regulated based on the Regulation of the Minister of Religion (PMA) Number 42 of 2016
concerning the Organization and Work Procedures of the Ministry of Religion (PMA
42/2016) and the Decree of the Minister of Religion (KMA) Number 270 of 2016
concerning the Business Process Map of the Ministry of Religion (KMA 270/2016).
Based on Article 6 of Law 33/2016, it is stated that in the implementation of JPH,
BPJPH is authorized to:
1. Formulate and establish JPH policies;
2. Establish JPH norms, standards, procedures, and criteria;
3. Issuing and revoking Halal Certificates and Halal Labels on products
Dharma Setiawan Negara, Samuel Dharma Putra Nainggolan, Lufsiana
Jurnal Indonesia Sosial Teknologi, Vol. 5, No. 7, July 2024 3258
4. Register Halal Certificates on foreign products
5. Conducting socialization, education, and publication of Halal Products
6. Accreditation of LPH;
7. Register as a Halal Auditor;
8. Supervise JPH;
9. Conducting Halal Auditor training; And
10. Collaborate with domestic and foreign institutions in the field of JPH implementation.
It does not stop there, based on Article 51 of Law 33/2016 it states that BPJPH and
related ministries and/or institutions that have the authority to supervise JPH can carry
out supervision individually or jointly which is carried out based on the provisions of
applicable laws and regulations.
Furthermore, regarding the role of MUI, BPJPH, and LPH related to halal product
certification, each institution already has responsibilities in the halal certification stage,
starting from the submission of the product owner to the issuance of the halal certificate
as follows:
Table 1
The Role of BPJPH, MUI, and LPH in the Issuance of Halal Certificates
Based on Law 33/2014
BPJPH
MUI
LPH
It has the task of
setting
rules/regulations,
receiving and
verifying product
submissions to be
certified halal from
business actors
(product owners), and
issuing halal
certificates along with
halal labels.
It has the task of
determining the
halalness of products
through halal fatwa
sessions. This halal
stipulation is both
related to standards and
halal products.
Have the task of
conducting halal
inspections and/or
testing. This inspection
is carried out by a
halal auditor owned by
LPH.
Looking at the table above, BPJPH cannot issue a halal certificate if there is no halal
stipulation from the MUI (through a fatwa session). It can be said that Law 33/2014
concerning Halal Product Assurance states that there are at least 3 (three) interrelated
institutions. Each institution involved in the process has its authority in carrying out its
duties by conducting a check and balance process by its authority. The role of LPH in
the scheme for issuing halal product certificates also needs to be observed, considering
that the role of LPH as previously in LPPOM MUI has shifted to LPH which can be filled
by independent parties (the community).
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Regarding the process of issuing halal certificates for a product by referring to the
Decree of the Head of the Halal Product Assurance Agency Number 12 of 2020
concerning Procedures for the Implementation of BPJPH Halal Certification Services and
the Regional Halal Certified Service Task Force (Decree of the Head of BPJPH 12/2020),
this regulation was issued in order to provide ease of access and acceleration of halal
certification services to the public, BPJPH and implementing a simplification of the halal
certification service process that can reach and approach business actors. The halal
certification service places are carried out at One-Stop Integrated Service (PTSP) of the
Central Ministry of Religion, Jalan Lapangan Banteng Barat Number 3-4, Central Jakarta
and PTSP Regional Office of the Ministry of Religion and/or Regency/City throughout
Indonesia.
Technically, the requirements for applying for halal certificates submitted by
Business Actors through BPJPH and Regional Task Forces (via PTSP) as stipulated in
Chapter II of the Decree of the Head of BPJPH 12/2020 must be completed with the
following documents:
1. Halal Certificate Application Letter, addressed to the Head of the Halal Product
Assurance Agency (Head of BPJPH);
2. Halal Certification Registration Form by attaching the following documents:
a. The legal aspects of the company include a copy of the Business Identification
Number (NIB). If you do not have a NIB, you can replace it with
SIUP/IUMK/IUI/API or others. Especially MSME business actors can be
replaced with a Taxpayer Identification Number (NPWP);
b. Halal supervisor documents include Copy of ID card, Copy of decree on the
determination of halal supervisor, curriculum vitae, Copy of halal supervisor
certificate (if any);
c. Copy of distribution permit/certificate of fitness for health.
3. List of product names and ingredients/menus/goods;
4. Product processing process, containing information on purchase, receipt, storage of
materials used, processing, packaging, storage of finished products, and distribution
5. Halal Product Assurance System (SJPH):
a. The Halal Product Assurance System (SJPH) is a management system document
that is prepared, implemented, and maintained by business actors to maintain the
continuity of the halal production process. This Halal Product Assurance System
will be established by BPJPH;
b. Regarding the fulfilment of current requirements, the SPJH document used is the
halal assurance system that applies at LPH today.
6. Power of Attorney, for direct applications made by persons other than the person in
charge of the Company
7. A copy of the halal certificate issued by MUI for products that have been halal
certified.
Furthermore, regarding the system, mechanism, and procedures for halal
certification services in the following stages:
Dharma Setiawan Negara, Samuel Dharma Putra Nainggolan, Lufsiana
Jurnal Indonesia Sosial Teknologi, Vol. 5, No. 7, July 2024 3260
1. Submission of halal certificate application
2. Checking the completeness of documents;
3. Determination of LPH to conduct halal product inspection/testing
4. Product inspection and/or testing;
5. Submission of the results of the inspection and/or testing of halal products from LPH
to BPJPH;
6. Submission of the results of product inspection and/or testing of halal products from
BPJPH to MUI;
7. Determination of halal products by MUI;
8. Submission of the results of the determination of halal products from MUI to BPJPH;
9. Issuance of halal certificates based on the results of the determination of halal products
from MUI by BPJPH;
10. Submission of halal certificates from BPJPH to business actors.
There is a fundamental difference in Article 4 of Law 33/2014 as amended by the
Job Creation Law which states that the obligation of halal-certified products for Micro,
Small and Medium Enterprises (MSMEs) products is based on the statement of business
actors (self-declaration). In the Job Creation Law, between Article 4 and Article 5, 1 (one)
article is inserted, namely Article 4A which stipulates that (paragraph 1): for Micro and
Small Business actors, the obligation to be halal certified as referred to in Article 4 is
based on the statement of Micro and Small Business actors. (paragraph 2): Statement of
Micro and Small Business actors as referred to in paragraph (1) based on halal standards
set by BPJPH.
The statement of Micro and Small Business actors in the halal self-declaration is
also needed to accompany the Halal Product Process (PPH) through verification and
validation of the self-declaration. Self-declaration according to the Job Creation Law is
only intended for Micro and Small Business actors. Furthermore, the state through Article
44 of the Job Creation Law states that halal certification for Micro and Small Business
actors is not subject to fees in its management.
The Relationship Between Product Halal Certification and Business Competition
Ethics
effort or action of two or more commercial interest to obtain the same business from
thiord
economic power by preventing monopoly, punishing cartels and otherwise protecting
competition. Examining the origins of the antitrust laws help to understand and interpret
them. Their historical lineage extends from common law actions which limited restraints
of trade and, so some extend, sought ti proscribe monopoly power and middlemen
The Head of the Halal Product Assurance Agency (BPJPH) of the Ministry of
Religion of the Republic of Indonesia, Muhammad Aqil Irham, revealed that halal is
currently a global trend. Along with this, the competition of consumer products consisting
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Jurnal Indonesia Sosial Teknologi, Vol. 5, No. 7, July 2024 3261
of food, beverages, cosmetics and so on is also increasingly competitive. According to
data compiled by BPJPH of the Ministry of Religion of the Republic of Indonesia, there
are already 45 (forty-five) countries with 117 (one hundred and seventeen) products that
have carried out the process to get recognition from BPJPH. Based on this, the positive
trend of various countries to get recognition from BPJPH, so the competition between
foreign products and domestic products will be more competitive. For example, if the
products of countries in the world that have been halal certified enter Indonesia, while
domestic products are not halal certified, then there can be a loss in market competition.
As an example of the use of halal products, statistics show that spending on
cosmetics is estimated to increase from $61 Billion in 2019 to $90 Billion in 2023. The
Royal Islamic Strategic Study Centre (RISSC) estimates that there will be 231.06 million
Muslims in Indonesia in 2023. Indonesia is a significant market. From the buyer's point
of view, halal-certified products are considered to have met high quality standards and
are considered an innovation and revolution in the cosmetics sector. There is also a stigma
that a product that has been certified halal has passed various strict inspections and
supervision. A product is considered halal when the ingredients of the product are in
accordance with sharia. Materials such as alcohol and substances derived from free
animals should not be used in the production process.
As one of the leading cosmetic brands in Indonesia, "Wardah" is a manufacturer of
beauty products that produces a variety of products. Currently, Wardah holds a market
share of 30% (thirty percent) where sales of 50% (fifty percent) are on the island of Java.
Wardah is one of the local cosmetic brands that promotes a halal brand image in its
products. This is because Wardah is the first cosmetic brand to receive halal certification
from LPPOM MUI in collaboration with the Ministry of Health (Depkes) and the
Department of Religion (Depag). Such a large market share owned by Wardah as a
pioneer of Halal cosmetics in Indonesia makes Wardah almost control 50% of the market
share. This is considering the difficulty of managing halal product certificates to LPPOM
MUI, but now with the mandatory halal certification for goods and/or services, it is hoped
that it will be easier to manage halal products by BPJPH. This is regulated in such a way
as to realize consumer protection. Regulations can also be expanded to ensure a strong
consumer protection mechanism. Through consumer protection regulations, it can target
the responsibility of business actors in marketing their products.
Based on Law Number 5 of 1999 concerning the Prohibition of Monopoly Practices
and Unfair Business Competition (Law 5/1999). The activities regulated in Articles 17 to
24 do not provide a definition of which activities are included in monopolistic practices
and unfair business competition. If in the prohibited agreement it is a two-party legal act,
then in the prohibited activity it is a unilateral legal act. The prohibited activities are as
follows:
1. Monopoly. In terms of monopoly, it comes from the Greek language, namely "monos"
and "polyen". Monos means alone, and Polien means seller, If the two words are
combined, it will mean that monopoly is "selling alone" which means being a sole
seller. Market control over the sale or offer of goods or services. Monopoly is the
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Jurnal Indonesia Sosial Teknologi, Vol. 5, No. 7, July 2024 3262
activity of controlling the production or marketing of goods and controlling the use of
services by one business actor or a certain group of business actors.
2. Monopsoni. It is an activity of controlling the receipt of the supply of goods or services
in a market by one business actor or a certain group of business actors.
3. Market Dominance. There are several market control activities that are prohibited,
namely: (rejecting or obstructing the entry of new business actors, preventing
consumers from contacting their business actors, restricting the circulation or sale of
goods or services of other business actors, discriminating against other business actors,
selling at a loss/slamming prices).
4. Plot. It is a form of cooperation carried out by business actors with other business
actors with the intention of controlling the market for the benefit of conspiring business
actors. It is an activity in order to win an unfair business competition in the form of a
conspiracy to win a tender, a conspiracy to steal the secrets of a rival company, a
conspiracy to damage the quality or image of a rival product
5. Dominant position. This means that the influence of business actors is very strong,
Article 1 number 4 of Law 5/1999 refers to it as a situation where business actors do
not have competitors which means in the market concerned in relation to the share that
is controlled by financial ability, the ability to access supply, sales and the ability to
adjust the supply and demand for certain goods and/or services.
6. Dual Positions. Based on Article 26 of Law 5/1999, it is regulated that a person who
holds a position as a director or commissioner of a company, at the same time is
prohibited from concurrently being a director or commissioner of another company.
7. Stock Ownership. Based on Article 27 of Law 5/1999, it is stated that business actors
are prohibited from owning majority shares in several similar companies, carrying out
business activities in the same field at the time concerned or establishing several
companies of the same kind.
8. Mergers, Smelting, and Extractors. It is regulated in Article 28 of Law 5/1999 that
business actors who are legal entities and non-legal entities that run companies are
fixed and continuous with the aim of making profits.
Conclusion
The authority to issue halal certification in Indonesia has been held by the
Indonesian Ulema Council (MUI) and LPPOM MUI as its technical unit. However, since
the promulgation of Law 33/2014, it has been under the Halal Product Assurance Agency
(BPJPH) which is an institution under the Ministry of Religion (Kemenag) of the
Republic of Indonesia. In carrying out its duties, BPJPH collaborates with relevant
ministries and/or institutions, the Halal Inspection Agency (LPH), the Halal Product
Process Assistance Agency (LP3H), the Indonesian Ulema Council (MUI), and the Halal
Product Fatwa Committee. Each of these institutions has authority in every stage of the
halal product certification process. It is no longer only issued by one institution. This is
certainly closely related to business competition. Indirectly, consumer products that have
been labeled halal will be more enjoyed by the market. Halal certification is often
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Jurnal Indonesia Sosial Teknologi, Vol. 5, No. 7, July 2024 3263
considered that a product has phenomenal innovations or findings, but this is not the case.
Regarding halal certification, it is also necessary to supervise every product that already
has halal certification whether it remains consistent in its application.
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