The Implementation of Law No. 33 (2014): A Literature Review

Efrina

Department of Gastronomy, State University of Jakarta, Jl Rawamangun Muka, Jakarta, Indonesia

Keywords: regulation of halal product, consumers, food service, consumer protection

Abstract: Law of the Republic of Indonesia No. 33 of 2014 is the legal foundation in providing comfort, safety, and

certainty of halal products for consumption and use, as well as in increasing the added value for business

actors who produce and sell halal products. Since 2014, the government began to apply this rule in stages

wherein 2019, the mandatory halal products will be implemented as a whole. A year before the mandatory

start, this paper reviews some studies related to the implementation of this law, primarily regarding the

protection of consumers and their interest in buying the food product related to halal issue or halal label on

the product. It can be concluded that consumer awareness toward halal label is very high and plays an

important role in determining which product to be consumed.

1 INTRODUCTION

Halal comes from Arabic which means it is allowed.

Halal is part of Islamic teachings that rule laid out in

the Qur'an and Hadith. Every Muslim is obliged to

apply halal rules as stated in Qur'an; Al Baqarah

verses 168 and 172. All types of food are halal except

carcasses, blood, pork, animals slaughtered by a name

other than Allah (Al Baqarah: 173), wild animals (HR

Muslim No 1933), and khamr (Al-maidah: 90). A

Muslim believes that they have to consume halal food

every day. It becomes a sensitive issue that

Indonesian Muslim pay more attention than a health

issue. Therefore when a research report spread

regarding the lard content (fat from pigs) in various

types of food in 1988, the issue became so big that

there was a wave of rejection of various food

products. A lot of food could not be sold because of

lard contain issue. The food manufacturers tried to

reduce the issue by creating advertisements that claim

halal products. It affected the national economics at

that time. Another issue was the issue of cigarette

filters that contain pig blood. The rumor becomes so

big that the selling of cigarettes decreased

significantly, many people decided to stop smoking

not because its dangerous for your body but because

of pig contents on the cigarette (LPPOM-MUI,

2015).

Halal also becomes one of the hot issues in the

world. Many countries, even the non-Muslim

countries, tried to conduct halal regulation on their

food products. In 2010, the first World Halal Europe

Forum was held to discuss the halal industry. The

Forum discussed Halal issues including certification

and consumer protection, new European legislation

on labeling the Halal and Kosher meat products, legal

implications of religious descriptions on product

labels, critical issues for Halal products manufacturer,

the emergence of national Halal accreditation bodies

in the global market, rising consumer power in the

Halal sector, and reaching consumers through digital

media (Salamah, 2010). Some countries, both G20s

and Europe countries, reported about the positive

response to halal certification both in the food and

food service industries such as Japan (Salamah,

2017), New Zealand (Salamah, 2016), Southeast

Asia, North Africa, Australia, US, Canada, and

Europe (Riaz, 2010). Therefore, these halal rules are

not only providing guarantees to consumers but also

providing benefits for business actors such as

increasing consumer confidence, reaching the global

halal food market, increasing product marketability in

markets and low-cost investments.

As a country where the majority of the population

is Muslim, consumer protection in the form of halal

food availability is an important thing that must be

done by the Indonesian government to ensure the

distribution of food products are genuinely halal and

safe for Muslim. Therefore the government through

the MUI (Indonesian Ulema Council) established a

Food Assessment and Cosmetic Medicine Study

Institute (LPPOM) to play an active role in halal

examination and certification of food products,

medicines, and cosmetics on 1989. To strengthen

LPPOM MUI position in doing its function of halal

Efrina, .

The Implementation of Law No. 33 (2014): A Literature Review.

DOI: 10.5220/0009921702110218

In Proceedings of the 1st International Conference on Recent Innovations (ICRI 2018), pages 211-218

ISBN: 978-989-758-458-9

211

certification, in 1996 a Memorandum of

Understanding between Ministry of Religion,

Ministry of Health, and MUI were signed. The

memorandum of understanding was followed by the

issuance of Minister of Religion Decree (KMA) No.

518 Year 2001 and KMA No. 519 Year 2001, which

strengthen MUI as a halal certification institution

which conducts inspection/audit, fatwa stipulation,

and issuance of halal certificate.

Although LPPOM MUI was established in 1989,

the implementation of halal certificates was first

issued in 1994 by the MUI based on the audit results

of the new LPPOM MUI after obtaining approval

from the Minister of Religion at that time. It was only

throughout approximately five years since its

establishment that the halal certification activities

could be realized. LPPOM MUI has conducted

various studies, mainly to get the right and effective

inspection methods related to the halal certification

audit process. This study is because getting accurate

information regarding the halalness of a food product

is not easy. In the process of inspecting halal

products, a laboratory test is not the only test for

deciding halal of product. For example, meatballs.

The critical process of meatballs is whether

slaughtering animals whose meat is used for making

meatballs using Islamic law or not (Yaqin, 2007).

However, a study about potential and

effectiveness of halal policies in Indonesia stated that

1) the effectiveness of the policy is still relatively low,

there is only 0.07% of halal-certified companies from

the total number of existing companies. 2) The

priority of halal food policy is needed to raise

awareness of the food industry in providing halal

product guarantees, 3) the government is the leading

actor. Moreover, the application of halal food policy

(certification) must be facilitated by the government

for all scales of the food industry (Syaifullah, 2007).

It means that the regulation has not been able to

increase the number of halal products in Indonesia. In

addition to the low level of participation, another

concern is the company's integrity to not replacing

raw materials without the permission from LPPOM.

When it happens, the company has to recall or

withdrawals their product which will certainly result

in large losses. Therefore in order to maintain and

ensure that the products obtaining a halal certificate

can be accounted for its halal consistency, LPPOM

MUI issues a Halal Assurance System policy so that

companies that are halal certified must implement this

halal guarantee system. The halal guarantee system is

a system that is made to maintain the sustainability of

halal production process to assure its halalness is

complying with the rule of LPPOM-MUI (LPPOM-

MUI, 2008). On its 23rd birthday, LPPOM issued

HAS 23000 as a halal guarantee system which

divided into two parts. First about Certification

Requirements: Criteria for Halal Assurance System

(HAS 23000) and the second part about Halal

Certification Requirements: Policies and Procedures

(HAS 23000). At the same time, the implementation

of E-HALAL REGISTRATION or Cerol-SS23000

was carried out for the registration of halal

certification, which can only be done online so that

the process is transparent, efficient and accountable,

whose benefits are felt by companies that want halal

certification services to be done quickly and

efficiently (LPPOM-MUI, 2012).

Law No. 33 of 2014 is the newest regulation for

Halal Product Guarantee. It confirms that products

entering, circulating, and trading in the Indonesian

Territory must be halal certified. For this reason, the

Government is responsible for organizing Halal

Product Guarantee (JPH). To carry out the JPH

implementation, according to this Law, a Halal

Product Guarantee Agency (BPJPH) which is placed

under and is responsible to the Minister of Religion is

established. If it is needed, BPJPH can form

representatives in the regions in order to a) Formulate

and stipulate JPH policies; b) Establish norms,

standards, procedures and criteria for JPH; c) Issue

and revoke Halal Certificates on foreign products;

and d) Register Halal Certificates on foreign products

and/or related institutions, such as Halal Inspection

Institution (LPH) and Indonesian Ulema Council

(MUI) (setkab, 2014).

In Article 67 of Law No. 33 of 2014, it is stated

that halal-certified obligations for products are valid

for five years since this Act is passed. One year before

the start of Indonesia Mandatory Halal, this paper

tried to review from various studies and sources

regarding the effects of the law regarding halal

product guarantee in Indonesia. Hopefully, this paper

will be able to increase knowledge of the community,

government and food product/service companies on

the importance of implementing Halal certificates and

also to emphasize that the 2019 Mandatory Halal

implementation will take place.

2 HALAL RELATED

REGULATION IN INDONESIA

Before the establishment of the JPH, regulations

concerning consumer protection against halal

products began in 1976. The law of the Minister of

Health of the Republic of Indonesia No. 280 /

Men.Kes / Per / XI / 76 in article 2 paragraph 1 stated

that containers or food packages domestically

produced or from foreign countries that contain

ingredients derived from pigs must be marked with a

warning sign. The warning sign referred to in

paragraph 1 is to be in the form of a picture of a pig

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and writing that reads, "Containing pig". Then in

1985, the Joint Decree of the Minister of Health and

the Minister of Religion specified the inclusion of the

words "halal" on food labels. In 1996, Law No. 7 of

1996 article 30 paragraph 2 regulated the food label,

that is the food label must at least include the name of

the product, list of ingredients used, net weight or net

content, name, and address of the party producing or

importer, description of halal as well as the date,

month, and expiry date.

Rules on food labels and advertisements are

detailed in Government Regulation No. 69 of 1999

concerning Food Labels and Advertising. Article 10

paragraph 1 stating that any person who produces or

imports product into the territory of Indonesia to be

traded, and states that the products are halal, is

responsible for the correctness of such statement.

Moreover, they must include the description or the

writings of halal on the label. Whereas article 11

paragraph 1 stating that to support the truth of the

statement of halal as referred to in article 10

paragraph 1, any person who manufactures or

incorporates packed food into the territory of

Indonesia to be traded, is mandatory to have the food

checked beforehand by the examiner who has been

accredited in accordance with the provisions of the

applicable legislation.

Then the regulation was reaffirmed through the

Decree of the Minister of Religion 519 of 2001

concerning the Institution of Halal Food Examination

which was stated in article 1, which showed that the

Indonesian Ulema Council shall act as an executing

agency for the inspection of food, which was

packaged to be traded in Indonesia and declared halal.

These verses emphasize the explanation of the Food

Law Article 30 paragraph 2, namely the inclusion of

halal information or writing on the food label is an

obligation if the party that produces and or inserts

food into the territory of Indonesia claims that the

product is halal for Muslims. For this reason, the

government through the MUI (Indonesian Ulema

Council) established a Food Assessment and

Cosmetic Medicine Study Institute to play an active

role in "halal" examination and certification of food

products, medicines, and cosmetics.

In 2014, the government approved the Law No. 33

of 2014 concerning Halal Product Guarantee (JPH).

The rules of prohibited substances (Articles 18-20)

are summarized as follows, namely (1) carcasses, (2)

blood, (3) pigs, (4) animals that are slaughtered not in

accordance with the Shari'a, (5) materials that can

endanger human health, (6) materials derived from

microbes and materials produced through chemical

processes, biological processes, or genetic

engineering processes are prohibited if the growth

process and/or manufacture are mixed, contained,

and/or contaminated with prohibited substances [18].

The prohibited materials are the materials exposed to

impure matters (mutanajis). Every mutanajis matter is

forbidden to be consumed. There are three kinds of

impurities. The first is the highly impure (lick from a

dog, pig, and their derivatives) which has to be

purified by washing it seven times where once of it

must be washed using soil/chemical material. The

second one is the moderately impure (urine,

human/animal feces), which has to be purified by

washing it until the taste and odor are gone. The third

is mildly impure (urine from an infant boy who is

only breastfed), which has to be purified by sprinkling

it with water or washing it using a wet cloth. The

summary of Halal regulation will be shown in Table

3 IMPLEMENTATION OF LAW

NO 33 OF 2014

3.1 Halal Certification before and after

Law No 33 of 2014

Halal Certificate is a written fatwa of the Indonesian

Ulema Council which states the halalness of a product

by Islamic sharia. This Halal Certificate is a condition

for obtaining permission to include halal labels on

product packaging from authorized government

agencies. The aim is to provide certainty of halal

status, to reassure the consumer in consuming it. The

continuity of halal production processes is guaranteed

by producers by implementing a Halal Assurance

System. The position of consumers towards business

people, in general, is very weak. Consumers are

objects of business activity from business people

through promotional tips, advertisements and often

deliberately harm consumers. Therefore, LPPOM-

MUI uses standard procedures as a guide to the

process of applying for halal certificates, which are

then outlined in the form of the SOP (Standard

Operation Procedure).

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Table 1: Halal-Related Regulations in Indonesia

Year Regulation

1976

 RI Minister of Health Regulation 280 / Men.kes / Per / XI / 76: provisions for

distribution and marking on foods containing ingredients derived from pigs

1985

 Joint Decree of the Minister of Health and Minister of Religion No 427 / Men.Kes /

SKB / VIII / 1985 and No. 68 of 1985 concerning the inclusion of the word "halal"

on the Food Label

1996

 Law No. 7 of 1996 concerning food

 Charter of cooperation between the Department of Health, Ministry of Religion,

Indonesian Ulema Council on the implementation of the labeling of "halal" on food

 Decree of the Minister of Health No. 924 / MENKES / SK / VIII / 1996: that the

approval of the inclusion of the word "Halal" was given by the director general of

POM based on the MUI fatwa

1999

 PP No. 69 of 1999 concerning food labels and advertisements

2001

 Decree of the Minister of Religion 518 of 2001 concerning Guidelines and

Procedures for inspection and determination of halal food

 Decree of the Minister of Religion 519 of 2001 concerning the Institute for the

implementation of halal food inspection

2014

 Law No. 33 of 2014 concerning guarantee of Halal products



This guide is always developed and continuously

improved, by the needs and development of science

and technology. The MUI determines the stages or

procedure steps and mechanism for determining halal

fatwa until the issuance of halal certificates. The

labeling system carried out by LPPOM MUI, and BP-

POM is an accountable activity (MUI, 2015)

There are at least eight types of information that

can be known from the food product packaging label,

namely halal certification, product name, content,

expiration time, the number of contents, identification

of product origin, nutritional information, and other

quality signs. This information must be considered

carefully so that consumers do not buy wrong. Each

product name packaging on the label is the main

information that allows consumers to identify the type

of product. In addition to the information, for certain

processed foods, business actors must include other

information relating to human health on the label.

Information and statements about food stated in the

label must be true and not misleading, whether

concerning writing, images or any other form

(LPPOM-MUI, 2008).

With the enactment of Law No. 33 of 2014, there

were several changes related to the implementation of

halal certificates. The fundamental difference is the

transfer of halal auditors from LPPOM to BPJPH

(Halal Product Assurance Organizing Agency).

Besides sanctions for auditors who do not do their

duties properly, article 57 states that there are

sanctions for two years imprisonment or a fine of two

billion. Some other differences are summarized in the

table 2.

Table 2 showed that one of the most important

things that changed was the change in the authority to

implement the halal guarantee system from LPPOM-

MUI to BPJPH. So far halal certificates have been

managed independently and centrally under the

control of the MUI. With the transfer of authority, the

process of making halal certificates is the

responsibility of the government. In addition, the

halal product testing in the laboratory that was once

centralized is now carried out by the halal inspection

agency that has been chosen by BPJPH. Until now

BPJPH has begun to draft the Ministry of Religion

Regulation (RPMA) and the Draft Minister of

Religion Decree (RKMA) which is about the

implementation of JPH and BPJPH finance. The

implementation of JPH includes procedures for

imposing sanctions, halal supervisors, procedures for

submitting applications and halal certificate renewals,

determining LPH, halal labels, community

participation and awarding, BPJPH cooperation with

Ministries / Institutions, MUI, and LPH, education

and halal auditor training, accreditation and

registration of LPH, non-halal information, and JPH

supervision. BPJPH Finance deals with the financial

management of BPJPH and payment procedures and

Halal certification facilities (BPJPH, 2018).

3.2 Consumer Behavior towards Halal

Label/ Certificate

Four years after the Halal Guarantee Law was

established, the implementation of this law has not

gone well. Halal Product Assurance Organizing

Agency (BPJPH) has not given its optimum function

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as an agency that is in charge of formulating and

laying down halal product guarantee policy. Whereas,

in article 4, it is clearly stated that BPJPH shall ensure

that all products circulated and traded in Indonesia are

bound to have a Halal certificate. Up until now, the

Halal certification process is still conducted by

LPPOM MUI. Until then, the government regulation

regarding the technical implementation has not yet

completed, although the government has proclaimed

Halal Obligation toward the product circulated in

Indonesia in the year 2019. The regulation ratification

has become an important agenda for the House of

Representatives to be finished because several

research has shown that halal label has a positive

influence toward the consumer trust on halal product

guarantee.

Table 2: Halal Certification before and After Law No 33 of 2014

Aspects Before After

Authority LPPOM MUI BPJPH

Sanctions there are no criminal sanctions

for auditors and food producer

Criminal sanctions

Certificate obligation Voluntary mandatory

Responsibility MUI government

Auditor body centralized Regional representative

Certificate validity periode 2 years 4 years

At present, halal product certification is not a legal

obligation for businesses to fulfil. The rule of law is

permissible (mogen). It is indeed created legal

uncertainty for millions of Muslim consumers in

Indonesia who are obliged to consume halal products

(Sofie and Yusuf, 2015). A study from 2006 state that

there are two urgencies in the implementation of halal

certification, namely: (1) On the moral aspect as a

form of accountability from producers to consumers.

(2) In the business aspect as a mean of marketing, to

increase trust and customer satisfaction. With the

existence of the JPH Law, the provision of halal

certificates has changed. If previously a halal

certificate was voluntary, then through this bill, halal

certificates must be owned by business actors.

Business actors who violate this provision are

proposed to be subject to criminal sanctions (Hariyadi

and Andarwulan, 2006). these problems are solved by

the existence of halal obligations and criminal

sanctions for auditors and business actors.

Several studies have shown that halal certification

affects the decision of consumers to purchase a

product, and there is a relation between halal labelling

and the purchase decision of imported food products

in packaging (Sari and Sudardjat, 2013). The

influence of the inclusion of halal labels on the

packaging of instant noodles on buying interest

happened because the halal label attached on the

package of instant noodles plays a role in increasing

buying interest (Rambe and Afifuddin, 2012). The

increase in halal label is significantly positive to

consumer interest of Muslim Noodle Samyang in

Malang city and vice versa; if there is a decrease in

Halal Label, it will reduce Purchasing Interest

(Nugraha, Mawardi, Bafadhal, 2017).

The benefits of halal labels for producers include:

(1) Having USP (Unique Selling Points). (2)

Increasing consumer confidence in the products

issued. (3) The opportunity to reach the global halal

food market whereas it is estimated that there is 1.4

billion Muslims and millions of other non-Muslims.

(4) Halal certification, a guarantee that can be trusted

to support halal food claims. (5) 100% profit from a

larger market share without losses from non-Muslim

markets/clients. (6) Increasing product marketability

in Muslim markets/countries. (7) Achievable low-

cost investment if compared to revenue growth. (8)

Product image enhancement (Ramadhani, 2018). The

research conducted by Yayat Supriyadi revealed that

when the halal labeling policy was used by food

industry products located in the Jabodetabek (Jakarta,

Bogor, Depok, Tangerang Bekasi) area, the results of

the sales of food industry products in Indonesia was

significantly affected. Therefore, the impact of the

halal labelling policy on the resilience of companies

that have used halal labels and have obtained halal

certification from the government is very significant

(Supriyadi, 2005).

Also, Ashari in his research said that the halalness

of food, medicine, and cosmetics product is not easy

to know, therefore a special study that is somewhat

deeper is needed. Halal certification aims to provide

legal certainty and legal protection to consumers and

increase the competitiveness of domestic national

products. Halal product certification provisions have

two main objectives, namely (a) protecting

consumers by making halal products that protected

and guaranteed by law available and (b) providing

benefits to producers by increasing competitiveness

and turnover of production and sales. These targets

The Implementation of Law No. 33 (2014): A Literature Review

215

will be achieved if you pay attention to the

certification of national halal products, and

standardize the certification process along with its

measuring tools, certification system, regulatory

principles for what purpose certification must be

carried out and certification bodies, equipment,

technology, laboratories that meet the standards, and

the validity period of halal certificates. Certification

must also reach raw materials, supplementary

materials and auxiliary materials in the form of non-

packaging for food, beverage, medicines, cosmetics

and other products circulating in the community.

Halal certification aims to provide legal certainty and

legal protection to consumers and increase the

competitiveness of domestic national products. Halal

product certification provisions have two main

objectives, namely (a) protecting consumers by

making halal products that protected and guaranteed

by law available and (b) providing benefits to

producers by increasing competitiveness and

turnover of production and sales. These targets will

be achieved if you pay attention to the certification of

national halal products, and standardize the

certification process along with its measuring tools,

certification system, regulatory principles for what

purpose certification must be carried out and

certification bodies, equipment, technology,

laboratories that meet the standards, and the validity

period of halal certificates. Certification must also

reach raw materials, supplementary materials and

auxiliary materials in the form of non-packaging

"non-packaging" for food, beverage, medicines,

cosmetics, and other products circulating in the

community (Ashari, 2006). Other researches also

showed that perception, brand image, and word of

mouth marketing gave positive influence toward the

desire of purchasing a product. Halal issues that have

not been resolved have significant influence in one

desire to purchase a product (Anggraeni, 2016).

One of the research related to business behaviour

manufacturers towards the halal label shows that

producer considers that business with the

manufacture of halal product not only hunts the

material profits. Their willingness to be able to give

protection to the consumers by giving halal products

become one of the goals. They concerned not only

material but social and spiritual as well (Said and

Elangkovan, 2013)

The announcement of this law to the industry has

not been understood and complied by all food

production line. Only major scale industry players

prepare their employee to do the halal certification.

The small and medium scale industry players aware

of this regulation are only a fraction. There are a few

players (in Tulungagung area) that merely knowing

the rules but do not have a thorough understanding

either on the old regulation of halal certification or the

new one (Ni'mah, 2018).

A study from Malaysia indicated that there is

significant and positive effect on halal food

purchasing intention. An important factor that

influence consumer intention is attitude. Those with

high positive attitudes have greater intentions to

purchase halal food products. Social pressure is also

affected to attitude in building intention to buy halal

food. This study is also confirmed that perceived

behavioural control has greater impact on halal food

purchasing intention (Alam and Sayuti, 2011)

4 DISCUSSION

It is apparent that consumer awareness toward halal

labels is very high and plays an important role in

determining which product to be consumed. On the

other hand, especially small and medium industries.

The study shows positive relations between the halal

label and the increasing of profit of the company.

Therefore, these are following recommendation from

this review.

First, Socialization will be needed to the change

of the law on halal product guarantees to the general

public, small and medium industries. There have been

no studies on how much their knowledge of halal

product guarantees. The government is obliged to

give understanding, affirmation, and knowledge in

order to protect the rights of the Muslim people. As a

country with the biggest Muslim base in the world,

the producers must give attention to the safety and

comfort of Muslim consumers. Further studies are

needed on how much the level of public knowledge

will be for Halal Product Guarantees.

Second, the government must socialize the

importance of halal certificates for business actors,

especially in the field of food service as part of

consumer protection and the implementation of food

safety. The culinary industry, especially small

industry such as small stalls and street vendors, still

thinks that halal food is food that does not contain

pork, while the current halal definition is increasingly

widespread and detailed. Many restaurant only

focuses on Pork free/no pork sign but do not

investigate to other sensitive ingredients such as

flavour, colouring addictive, etc. The producers of

halal certification and labelling are not only for

Muslim consumers safety but also for the producers'

economic benefits. Certification and halal labelling

are the business ethics that must be conducted by the

producers in order to protect the rights of Muslim

people in Indonesia. There needs to be a study on the

knowledge of small-scale business actors on the

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implementation of halal guarantees in the proses of

making halal and healthy food products.

Third, the year of 2019 is closer while the rules

that govern in detail of the implementation of halal

certificate procedures have not yet been ratified. This

certainly causes unrest for the food industry because

this policy will certainly change the halal product

guarantee process in the company including halal

production processes, halal supervisors, SOPs, and

supporting documents. The government should

ensure this situation so that before 2019, the food

industry has some information regarding halal

mandatory.

Fourth, Mandatory halal socialization is not only

carried out by business actors and the government,

but also by all levels of society in Indonesia.

Therefore, there is a need to socialize halal product

guarantees to the student through the creation of

modules and courses for students in the culinary or

food fields, as well as material related to halal

knowledge from elementary to high school students.

The goal is a halal guarantee system running with

synergy so that supervision is not always from the

government / BPJPH but also from the community.

This review is expected to contribute in providing

knowledge to the public, the government and food

product/service companies on the importance of

implementing Halal certificates and to increase the

opportunities of exports to other Muslim countries

and also to encourage Indonesia as a center for halal

product development.

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