Indonesia Delays Halal Certification for SMEs Until 2026

In a significant move to support micro and small enterprises (SMEs), Indonesian Coordinating Minister for Economic Affairs Airlangga Hartarto announced that the government will postpone the mandatory halal certification for these businesses until October 17, 2026. This decision, made during an internal meeting with President Joko Widodo at the Jakarta Merdeka Palace on May 15, 2024, aims to provide SMEs with more time to comply with the regulations.

Supporting SMEs in the Halal Industry

The postponement of mandatory halal certification for SMEs comes in response to the challenges faced by many small businesses in meeting the certification requirements. Airlangga Hartarto explained, “The implementation of mandatory halal certification has not yet reached the target as many SME products have not been certified.” The extension provides these enterprises with additional time to ensure their products meet halal standards, thereby supporting their growth and compliance efforts.

Current Certification Status

As of May 15, 2024, the Halal Product Guarantee Organizing Agency has issued halal certification for 4,418,343 products since 2019, representing 44.18 percent of the target of 10 million products. With an estimated 28 million SMEs in Indonesia, reaching the certification goal has been challenging.

Expanded Authority for Certification

To streamline the certification process, the government has expanded the authority to issue halal certifications to regional bodies, including the regional Majelis Ulama Indonesia (MUI), the Aceh Ulama Consultative Council, and the Halal Product Fatwa Committee. This decentralization aims to make the certification process more accessible and efficient for SMEs across the country.

Broader Implications of the Postponement

The decision to postpone the halal certification for SMEs will also apply to various sectors beyond the food and beverage industry. Airlangga Hartarto noted that the extension covers cosmetics, accessories, household goods, and health devices. This broad application is intended to ensure that all relevant SME products can achieve compliance without undue pressure.

Commitment to Halal Certification

While the deadline for SMEs has been extended, the government remains committed to the mandatory halal certification for medium and large enterprises, which is still set for October 17, 2024. This phased approach reflects a balanced effort to uphold halal standards while accommodating the capacities of smaller businesses.

Economic and Social Impact

The halal certification for SMEs is crucial not only for compliance with religious and ethical standards but also for enhancing the competitiveness of Indonesian products in both domestic and international markets. The postponement is expected to provide SMEs with the necessary time and resources to achieve certification, ultimately contributing to their long-term sustainability and growth.

Indonesia’s decision to postpone mandatory halal certification for SMEs until 2026 underscores the government’s commitment to supporting small businesses while maintaining the integrity of halal standards. By extending the deadline and expanding certification authorities, the government aims to facilitate a smoother transition for SMEs, ensuring they can meet the certification requirements without compromising their operations. As Indonesia continues to develop its halal industry, these measures will play a critical role in fostering a robust and inclusive economic environment.