ASEAN’s halal challenges explained

We speak to an expert about halal-related challenges faced by companies in Southeast Asia, and efforts being made to address them
An interview with
Associate Professor at the Singapore Institute of Technology

Southeast Asia’s halal market is growing. As demand continues to explode, there remain critical challenges linked with standardisation, certification, audit and the interpretation of halal across the region. This can make it extremely difficult for companies to navigate the halal landscape when entering the ASEAN halal market.

In this interview, Dr Siti Noorbaiyah Abdul Malek, Associate Professor at the Singapore Institute of Technology’s Chemical Engineering and Food Technology Cluster, speaks with Siddharth Poddar and Shivaji Bagchi of Unravel about the main challenges of the halal market in ASEAN and efforts underway to resolve them.

Unravel: For manufacturers and exporters looking at the ASEAN market, what are some of the halal-related challenges?

Siti Noorbaiyah Abdul Malek: Varying levels of legislation, different standards and requirements for certification, and transparency during auditing are some of the halal related challenges that manufacturers and exporters face in ASEAN. For example, halal certification in most ASEAN countries is voluntary in nature, that is based on the Trade Description Act, as in Malaysia, or the Administration of Muslim Law Act, as in Singapore. Indonesia, meanwhile, through its Law 33/2014 (“Halal Law”), has made halal mandatory for many consumer products and related services, including food and beverages.

Regarding halal standards, Malaysia has the most extensive standards, currently at 15, that cover a wide range of halal businesses. For example, the MS1500:2019, now in version three, has been the gold standard benchmarked for all the other halal standards around the world for the production, preparation, handling and storage of halal foods. Additionally, to-date, only Malaysia has a series of standards which covers the management of halal supply chain and logistics, the MS2400:2019, now in version two.

Furthermore, Malaysia has issued Malaysian Standards covering other industry sectors, including MS2636:2019 on the general requirements for halal medical devices; MS2634:2019 for halal cosmetics; MS2200:2012 for Islamic consumer goods (specific for the usage of animal bone, skin and hair); MS2565:2014 on guidelines on halal packaging; MS2594:2015 for halal chemicals (for use in potable water treatment); MS2627:2017 for detection of porcine DNA in food and food products; MS1900 for shariah-based quality management system, to name a few.

While having all these standards makes it much easier for companies to do halal business in Malaysia, the same cannot be said when it comes to trading halal goods and services between ASEAN countries as these standards are only valid in Malaysia. Therefore, this causes much confusion for companies to the extent that it has been viewed as a barrier to intra-ASEAN trade.

The competency of halal auditors is another challenge that companies face when applying for halal certification. Some halal auditors come strictly from a religious studies background, and they lack the scientific and technical knowledge and training necessary to audit companies that use risk-based halal assurance systems.

While having all these standards makes it much easier for companies to do halal business in Malaysia, the same cannot be said when it comes to trading halal goods and services between ASEAN countries as these standards are only valid in Malaysia.

Unravel: Are efforts being made to resolve these challenges?

Ms Malek: Yes, of course. ASEAN has established the Working Group on Halal Food, under the ASEAN Ministers of Agriculture and Forestry (AMAF). To-date, this working group has issued the ASEAN General Guidelines on the Preparation and Handling of Halal Food, which is an adaptation of the MS1500:2009 version. Additionally, four ASEAN countries, comprising Malaysia, Indonesia, Brunei and Singapore, have annual meetings of their religious ministers under the banner of MABIMS, which discusses, among others, some aspects of harmonising the processes of halal certification and auditing.

Unravel: In that sense, it’s unlikely that we are going to see harmonisation to the degree that somebody can apply for an ASEAN license or an ASEAN halal certificate?

Ms Malek: Unless authorities responsible for managing halal in the respective ASEAN countries agree to harmonise important aspects of the standards, certification and auditing processes that currently pose a challenge for companies towards acquiring halal certification, I don’t foresee that happening in the near future.

Lack of standardisation, and mutual recognition of certification and auditing processes are the main reasons why this high-growth halal sector is failing to meet its true potential in ASEAN.

Unravel: In your view, what is the future of the region’s halal industry in terms of the growth in size? And do you see halal attracting the non-Muslim market as well? Is that a trend that you’re witnessing?

Ms Malek: The future of halal in the region is extremely bright. Trade in halal goods and services is one of the fastest growing in the ASEAN region. However, this has not made an impact on the estimated global halal trade, valued at trillions of dollars. To date, the value of halal goods and services is led by Malaysia at $10 billion, followed by Indonesia at $4 billion, while Thailand and the Philippines is less than $1 billion each.

As I have said earlier, lack of standardisation and mutual recognition of certification and auditing processes are the main reasons why this high-growth sector is failing to meet its true potential in ASEAN. In order to maximise the region’s contribution to the halal goods and services business, we must remove these obstacles that prevent companies from actively seeking halal certification for their products.

I believe the non-Muslim market, whether in ASEAN or globally, is an important sector that can be targeted for halal goods and services. Take for instance, halal food and beverages. They are already in the mainstream in most ASEAN countries, if not globally. The reason is, halal certified food and beverages is closely tied to food safety, food hygiene, purity and to health, as halal certification requirements are based on risk-based halal assurance system (HAS), a system adapted from the internationally recognised food safety system, the Hazard Analysis and Critical Control Point (HACCP). Hence, although halal is a religious observance that is mandated for Muslims, the high standards required for halal certification have gained the trust of non-Muslims too.

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Associate Professor at the Singapore Institute of Technology

Dr Siti Noorbaiyah Binti Abdul Malek is currently an Associate Professor at the Singapore Institute of Technology’s (SIT) Chemical Engineering and Food Technology Cluster. She has served in both public and private sectors. She started her career as an academician and after 20 years, she took up a regional role at the Food Industry Asia (FIA) as its head of regulatory affairs. While holding the post, she was seconded to the ASEAN Food and Beverage Alliance (AFBA) as its first Executive Director. Her primary role in AFBA involved work on harmonisation of food standards and addressing Technical Barriers to Trade (TBT) in the food and beverage sector. Dr Siti is an active member of the Malaysian Institute of Food Technology (MIFT) and was its president for the 2014/2016 term.

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