Indonesia’s Omnibus Law: Halal Certification to Impact Businesses | Dezan Shira & Associates

Indonesia issued a new Halal certification law, under Government Regulation 39 of 2021 (GR 39/2021) that will impact businesses in most industries. GR 39/2021 states that products that enter, circulate, and are traded in Indonesia must be Halal certified unless they are originating from materials prohibited under Islam (Haram).

GR 39/2021 is one of a number of implementing regulations of the Omnibus Law introduced in November 2020. The Omnibus Law amends some 76 laws with the aim to reform Indonesia’s business climate, boost foreign investments, and create jobs.

Under GR39/2021, the assessment for Halal certification covers Halal-based materials and the Halal-based production process, which includes the storage, packaging, display, and sale of products.

As the world’s most populous Muslim country, Indonesia is naturally also the world’s largest Halal market, particularly for the food, tourism, cosmetic, and pharmaceutical sectors. Before the pandemic, global spending on Halal products reached over US$2 trillion with Indonesian consumers spending some 10 percent or over US$200 billion of this total on Halal products and services.

GR 39/2021 revokes the government’s previous regulation (GR31/2019) on Halal certification.

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