Halal Industry

INTERVIEW-Malaysia ready to lend expertise to harmonise halal accreditation globally - JAKIM

| 22 January, 2018 | Interview
 Richard Whitehead
INTERVIEW-Malaysia ready to lend expertise to harmonise halal accreditation globally - JAKIM
FILE PHOTO: JAKIM Halal Hub director Datuk Dr Sirajuddin Suhaimee. Photo by New Straits Times

*Correction: Para 16 changed from "Meanwhile, Malaysia has been active in opening up new markets for its own certification system, especially across East Asia, through the Halal Industry Development Corporation (HDC), JAKIM’s industrial counterpart." to “Meanwhile, Malaysia has been active in opening up new markets for halal industry development and promotion especially across East Asia, through the Halal Industry Development Corporation (HDC)." to better represent the role and work of the HDC. 

KUALA LUMPUR - Malaysia is content to allow its competitors to catch up after 40 years as the global leader in halal certification—even if it means forfeiting its position at accreditation’s top table.

By establishing a world body to unify halal standards, and recently accepting an invitation to help steer an authority charged with harmonising regulations in Muslim-majority countries, Malaysia has demonstrated a willingness to share its expertise. Yet such initiatives will undoubtedly impact on the country’s halal hegemony over time.

Speaking at his office in the Department of Islamic Development (JAKIM) complex in Putrajaya, just outside Kuala Lumpur, Dr Sirajuddin Suhaimee is sanguine about the prospect. As halal’s chief certifier, he believes that helping Muslim consumers, manufacturers and traders around the world can only be beneficial.

“Our long-term target is to harmonise accreditation across the world,” the director of JAKIM’s Halal Hub Division told Salaam Gateway. “Why do we need to compete with each other, without sharing anything positive?”

Whereas secular trade adheres to global codified standards, such as those laid down by the International Organisation for Standardisation (ISO) for proprietary, industrial and commercial standards, and the Codex Alimentarius Commission for food, there is no single rulebook for halal.

But Malaysia, which will soon embark on the third review of its halal food standards that are issued by the nation’s Department of Standards, has over the decades developed the closest thing to global norms. This is while other countries might only just be starting work on their own guidelines, which will often deviate based on different interpretations of Islamic teachings and principles.

Suhaimee acknowledges that halal “marks”, which are awarded by JAKIM and some 200 other certification bodies around the world, are being used by manufacturers to promote their products across Muslim markets. Malaysia’s mark, for example, will allow exporters access to countries which recognise only certain accreditation. He says manufacturers are more likely to order from suppliers that can offer robust certification.

As a body that recognises 67 certification authorities from 41 countries, JAKIM is viewed as the most robust of all. This also helps partly explain the success of Malaysia’s halal manufacturing sector, which has seen rapid growth in production to 178 billion Malaysian ringgit ($45.2 billion) in 2015 from 122.6 billion five years earlier, according to recently released data from the Department of Statistics. Meanwhile, the value of halal exports is expected to be around 50 billion ringgit by 2020, a leap from 19 billion a decade earlier.

It is hoped that this will increase even faster following a frenetic year for Malaysia’s halal authorities that could lead to even more halal trade being done.

IHAB, IHAF

In May, Malaysia was invited onto the board of the Standards and Metrology Institute for the Islamic Countries (SMIIC). When it is formally appointed to the role, the country will have a strong say in SMIIC’s agenda to harmonise standards within the Organisation of Islamic Cooperation (OIC) and prepare new ones as a means to eliminate barriers to trade among members.

The following month, Malaysia announced it would form an International Halal Authority Board (IHAB), through which it aims to bring "all certification bodies… under one platform, towards the harmonisation of halal standards” when it launches in April, according to Suhaimee.

This is a curious move, given that IHAB’s mission could be seen to mirror that of the International Halal Accreditation Forum (IHAF). The independent, Dubai-based IHAF states that its role is to harmonise conformity assessment practices in the halal sector, and help ratify multilateral recognition agreements between members.

Suhaimee disagrees that IHAB and IHAF will be in competition with each other, however, pointing out that Malaysia’s government-backed platform will be far more wide-ranging by seeking to unify every nation’s standards for mutual recognition, “so products can be transported from one part of the world to another”.

“As for now, IHAF is not directly under the government and only a few countries have become members,” he added.

It is hard to accept Suhaimee’s argument as IHAF, while asserting its status as an independent organisation, is spearheaded by government body the Dubai Islamic Economy Development Centre (DIEDC) and the national-level Emirates Authority for Standardization and Metrology (ESMA). As well, IHAF has grown from 10 founding members to 25 accreditation agencies today since its establishment in May 2016. Its members represent around 27 countries, half of which are non-Islamic.

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NEW HALAL MARKETS

Meanwhile, Malaysia has been active in opening up new markets for halal industry development and promotion especially across East Asia, through the Halal Industry Development Corporation (HDC).

Malaysia’s offer in late 2016 to send officials to Japan ahead of the Tokyo 2020 Olympic Games to offer advice on preparing halal food for Muslim athletes was widely reported.

At the same time, the regulator has been receiving up to 150 applications annually from companies in Japan, China, South Korea and Taiwan to certify their products and services.

Japan in particular has been waking up to halal, largely because of the Olympics and growing tourism from Islamic countries. As restaurants realise the benefits of catering for a new wave of Muslim visitors, and food exports continue to expand, businesses are increasingly looking to gain halal certification—indeed, the Tokyo municipality of Taito is offering companies a 50 per cent subsidy on the cost of gaining a halal mark.

This in turn has prompted the development of a new halal certification industry in Japan, with several bodies opening over the last three years. JAKIM currently recognises six Japan-based certification bodies while others are working to gain the authority’s approval, including the Japan Halal Foundation (JHF).

“JAKIM is the pioneer of halal certification bodies,” said Faslin Lafir, a food scientist who handles the technical aspects of JHF’s certification process. “If we get JAKIM accreditation it means we can add more value to the companies we certify.”

Malaysia_Halal Industry Development Corporation CEO Datuk Seri Jamil Bidin

Photo: Halal Industry Development Corp chief executive officer Datuk Seri Jamil Bidin says new framework will empower local firms to gain competitive advantage globally. PIC BY EIZAIRI SHAMSUDIN / New Straits Times

CRITICISMS

JHF is still being audited by JAKIM, which has a roving team of 25 officials who monitor applicants domestically and overseas. In February, a delegation will arrive from Malaysia to assess the certifier’s credibility, capacity and processes.

Given the rate of applications the Malaysian accreditor has received, the number of inspectors could appear low. But JAKIM’s director brushes off suggestions that the auditing department might be under-resourced.

“Yes we do agree that the demand from international halal organisations to become recognised certification bodies keeps increasing day by day. We provide a competent service with enough assessors so that only organisations that comply with all our requirements will be approved,” said Suhaimee.

However, Lafir suggests that a shortage of auditors has made JHF’s application, which began last October, a lengthy process. He believes, though, that the route JHF is taking with JAKIM will be worthwhile.

“It takes a long time because for foreign accreditation, there aren’t many people,” he said.

“They will correct us if we need to take any action, which is most helpful for us. They will also train our auditors in Malaysia, and teach us about new standards when they arise.”

JAKIM also points to an online database developed last year that it hopes will support the efforts of its auditors. The Malaysia International Halal Authorities and Bodies system (MyIHAB) has been designed to integrate online registration and management for Malaysian and international accreditation bodies.

‘PERCEPTION AND REALITY’ GAP

Yet as Malaysia’s sphere of influence increases even further, it is important to accept that certification is not a direct source of revenue for the country. According to Jamil Bidin, chief executive of the HDC, which promotes Malaysia’s halal industry, there is a difference between the “perception and reality” of halal regulation.

Though he is responsible for promoting Malaysia’s halal capabilities, he cautions that Islamic observant trade is “only a process within the overall halal industry”.

While Bidin agrees that suppliers have a distinct advantage through being certified by JAKIM when it comes to pitching for business from manufacturers, he believes the age-old laws of supply, demand and quality still apply at each end of the transaction. In effect, halal is not very different to secular industries.

“Manufacturers will want to have certification that counts in terms of integrity—they want to know that they will not have a problem with the certificates. [And] if they want to export their products, they will not have trouble getting their products into certain countries,” Bidin told Salaam Gateway.

“The reality is that Malaysian companies are selling their products through basic things like quality, price, packaging, marketing, and so on. Consumers around the world don’t have any preference over which logo is used.”

As the halal world sees greater harmonisation, Bidin believes his country’s place at the head of the table will be maintained through its well-developed halal ecosystem, in support of the industry.

Claiming that Malaysia is the only country to have such comprehensive halal manufacturing capabilities, alongside government support, skilled staff, financial incentives and infrastructure, he says that halal certification is “just one of the components” of this ecosystem.

What the halal industry needs now is to embrace the digital economy, new technology and innovation.

“We can’t ignore this: certification will not take you everywhere in the global market. It’s about the whole ecosystem—this is a very important word,” he added.

Back in Putrajaya, JAKIM’s Suhaimee reflects on how public opinion has changed since Malaysia first embarked on drafting halal standards, four decades ago. Back then, the idea of devising a bag of formal regulations was unheard of.

“They said, if you want halal, just refer to the Quran. But that’s why we needed these standards—so the industry can get a better understanding of how to produce halal products.

“And that’s why they are now looking at Malaysia to provide the benchmark,” he said.

($1 = 3.94 Malaysian ringgit)

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

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