News From : DagangHalal.com (26 Aug 2009)
Poorly thought-out laws can have unintended consequences, often for the worse. The new bill proposing to make halal certification mandatory for a wide range of products is one example.
The law, if passed, would apply to food and beverages, drugs and cosmetic products, from small-scale producers to large-scale manufacturers. Currently, halal certification is voluntary and is issued by the Indonesian Council of Ulema (MUI).
In principle, any law that makes certification mandatory is counterproductive. The halal bill, which is now before the House of Representatives, would empower a third party to certify whether a product is halal or not, for a fee of course.
The bill has met a wave of protests from small-scale industry players, and rightly so. Not only would the proposed law drive up business costs, which is almost always undesirable, it would open opportunities for abuse. As it stands, the bill, which was sponsored by the Religious Affairs Ministry a year ago, stipulates that halal labels be issued by an independent body, which would include representatives of the Religious Affairs Ministry and MUI.
Rather than enact new laws, which raise costs and complicate procedures, the ministry and legislature should let the market decide whether or not food and beverages should be labeled as halal. If consumers demand such labels, producers would automatically seek such certification. That is how the system currently works, and it works well.
But if certification is made mandatory and if a third party is given the power to do so, there would be risks of subjectivity and corruption, not to mention higher costs, which ultimately would be passed on to consumers.
The complexity of implementing the proposed law is obvious, given the food production chain. Large-scale producers may be able to easily ascertain whether their products are halal, but how would a meatball vendor attain a halal certification for his product?
The government should instead be working to simplify procedures and create a business- friendly environment that promotes certainty, predictability and competitiveness. It should ensure that costs are kept as low as possible and procedures kept simple and transparent.
The bill requiring mandatory halal certification should be scrapped.
The Indonesian Chamber of Commerce and Industry (Kadin) is absolutely correct in saying that if the market demands halal labeling, producers would voluntarily seek such certification. Making it mandatory would create another level of red tape in a system that is already overly bureaucratic.
In today’s uncertain economic climate, the last thing that businesses need is another law that complicates procedures and raises costs. Small-scale businesses should be helped by making it easier and less costly for them to operate. The halal bill has the potential to decimate this sector, which comprises a formidable voting block. Legislators should listen carefully to their constituents on this issue.
Source: JakartaGlobe