Halal Industry 

Halal industry shaken as certification bodies accuse Indonesia’s MUI official of extortion

| 19 April, 2019
Halal industry shaken as certification bodies accuse Indonesia’s MUI official of extortion
Photo: Indonesia's LPPOM-MUI halal label is seen on a pack of food displayed to sell at a mini market in Jakarta, Indonesia, February 15, 2019. REUTERS/Willy Kurniawan

A senior official in Indonesia’s top halal certification authority has been accused of extorting money from certification bodies to renew their licences, according to documents seen by Salaam Gateway.

Among these letters, affidavits and email trails, Lukmanul Hakim, head of Majelis Ulema Indonesia (MUI) Assessment Institute for Foods, Drugs And Cosmetics (LPPOM), is said to have “misused/corrupted his position” as LPPOM’s executive director.

LPPOM-MUI is Indonesia’s top Muslim clerical body that has been the country’s only halal certifier for around two decades. As part of its services, LPPOM-MUI recognises halal certificates issued by foreign certifying bodies that it approves. This recognition is based on the capability of the foreign certifying body to comply with LPPOM-MUI’s halal standards and procedures. For approved foreign certifying bodies and the companies whose products they certify, this means access into the Indonesian market. This is an important source of business for halal certifying bodies that are paid for their services by companies seeking entry into Indonesia.  

It is alleged that Lukmanul and other MUI officials demanded the transfer of “exorbitant sums of money” from foreign bodies for them to remain on MUI’s list of approved certifying bodies.

These wires, it is claimed, could each amount to 50,000 euros or more each year, with failure to pay likely to result in a certifier’s halal stamps being rejected and the organisation’s removal from the list of foreign certifying bodies approved by MUI.

One of these certifiers, according to one letter, was asked to pay as much as 120,000 euros to be relisted by MUI, it was alleged, based on evidence from a WhatsApp conversation between the certification body and officials.

The author of a document calling on Lukmanul to step down from his role at LPPOM-MUI and as president of the World Halal Food Council, an international grouping of certification bodies, said their own organisation’s recognition expired last year after they had refused to pay a bribe. This happened, they said, even though MUI’s director had written to them confirming that their business adhered to all the authority’s regulations.

The individual requested not to be named by Salaam Gateway due to the sensitivity of the matter.

The certifier referred to “we and other halal certification bodies around the globe” being “exposed to acts of extortion”, naming Lukmanul and a middle man who is not a MUI official.

The certifier said that, in 2017, they forwarded details of the extortion case to the Indonesian police, including a dossier containing details of this alleged corruption to MUI and Indonesia’s Corruption Eradication Commission (KPK), and religious groups, among others.

Salaam Gateway has also seen statutory declarations by several halal certification bodies in the United States, Europe and Asia Pacific that also allege extortion by Lukmanul and his associates.

Lukmanul Hakim could not be reached despite repeated attempts by Salaam Gateway to contact him by phone and messages to his mobile phone.

‘CONFLICT OF INTEREST’

The halal certifying body that brought the extortion case against Lukmanul Hakim in 2017 is also calling on the lawyer representing MUI to step down from his post as head of Indonesia Halal Watch (IHW).

In an open letter dated April 15 seen by Salaam Gateway, addressed to IHW director Ikhsan Abdullah and cc-ing certification bodies, halal authorities and other parties including the president of Indonesia, the halal certifying body demanded the lawyer-cum-advocate’s resignation as it represented a “conflict of interest”.

Ikhsan could not be reached through his law office and Salaam Gateway cannot confirm that he is currently the lawyer representing MUI or Lukmanul Hakim.

The certifier, who asked for their identity not to be revealed by Salaam Gateway, wrote in the April 15 letter, “We have come to learn that you are the executive director of an organisation supposedly set up for the protection of Muslim consumers.”

“Your involvement in this case is a glaring antithesis of what… [Indonesia] Halal Watch stands for. Your double standards are apparent by your representation of those charged with bribery and corruption.”

Failing Ikhsan’s departure from the helm of Indonesia Halal Watch, the writer threatened “a public campaign against you exposing your double standards not only to the Muslims of Indonesia but the international halal community.”

Asked by Salaam Gateway why they had chosen this moment to call for Ikhsan’s resignation, the certifier would only say: “Corruption has no place in halal”.

The certifier said they had immediately received messages of solidarity from other halal certification bodies following the release of their letter.

“We are with you, brother,” said one WhatsApp message that was shared with Salaam Gateway. “We have also had the same issue with [MUI].”

Others have been as effusive in their support after viewing the letter referring to Ikhsan. “Certifiers talk about it like it is just par for the course, or they will not get into the countries that ask for [bribes],” said one stakeholder, adding: “But none have had the bravery… to finally stand up to it”, in reference to the letter-sender.

MUI ‘PRONE TO CORRUPTION’

Adnan Topan Husod, coordinator of Indonesia Corruption Watch (ICW), a non-governmental organisation that monitors and reports to the public incidents of corruption, told Salaam Gateway that the way MUI is set up makes it prone to corruption.

“MUI is not a transparent and accountable institution because there is no annual audit, there is no financial report that the public can read every year. It is therefore possible that anyone within MUI can abuse their power in order to get their own benefits,” Adnan told Salaam Gateway.

Adnan said he has also seen testimony alleging corruption by MUI officials over halal certification, though ICW has not yet been able to take action.

He said that one complaint ICW received involves a major Indonesian food company which was forced to hand over money to LPPOM-MUI officials in return for certification.  

“MUI doesn’t release their standard approach towards fees, follow-up fees, timeframe of getting halal certification. All of this information is kept very close."

Though MUI is a government-funded body, it operates as a non-governmental organisation. As such, it does not come under the purview of Indonesia's Corruption Eradication Commission (KPK). Under local anti-corruption laws, KPK can only investigate cases involving public officials, according to ICW.

“There is no institution or law enforcement that can deal with MUI,” said Adnan. “Sometimes when they start to investigate the MUI ulama, [officials] can easily say the government is criminalising them. They can say the government doesn’t support Islam and the ulama, so it becomes politically tricky.”

The only way for whistleblowers to take action against MUI, Adnan said, is by filing police reports or taking private action. Either way, doing so risks exposing their own and their businesses’ identities.

NEW HALAL CERTIFICATION SYSTEM

The case against Lukmanul Hakim that the halal certifying body says it lodged with the Indonesian police in 2017 follows a February 2014 exposé of LPPOM’s certification practices in Australia by Indonesian publication Tempo.

In it, the news magazine alleged that MUI solicited bribes in exchange for granting licences to issue halal certification.

MUI denied wrongdoing in response to Tempo’s 2014 news report, with Lukmanul Hakim saying that MUI charges foreign certifying bodies to cover the cost of officials’ “visit expenses”.

The then MUI chairman, Amidhan Shaberah, stated that halal certification should be free of charge.

LPPOM-MUI will cease to be Indonesia’s halal certifier from October this year with the start of a new system.

As mandated by Law No. 33/2014, signed by the Indonesian president in November 2014, halal certification will become mandatory for all products that are halal. Halal certification in Indonesia is currently an opt-in process.

The work of certification will fall on new government agency the Halal Product Assurance Agency (BPJPH) that is directly subordinate to the Ministry of Religious Affairs.

After more than four years of preparation, BPJPH will start operations on October 17 this year.

MUI will continue in its role to pass fatawa and LPPOM will be one of the many nation-wide laboratories working with the government agency to support the work of halal audit and certification.

(Reporting by Richard Whitehead; Editing by Emmy Abdul Alim emmy.alim@refinitiv.com)

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