MSMEs and the Halal Certification Obligation: On Critical Material Points

The halal certification obligation applies in stages to certain product groups. For micro and small businesses, this obligation often feels burdensome not because of just one thing. There is the issue of paperwork, the issue of cost, and an issue that is rarely discussed: ensuring that the materials used can truly be traced back to their origin.

An Obligation That Applies in Stages

The product groups required to be halal-certified are set out through Minister of Religious Affairs Decree Number 748 of 2021, along with its phasing. This decree was later amended by KMA 944/2024. This means the obligation does not come simultaneously for all types of products.

The latest amendment to Law 33/2014 through Law Number 6 of 2023 simplifies the certification process. One way is by introducing a halal declaration or self-declare scheme for MSMEs, and opening the way for the Halal Product Fatwa Committee. This simplification helps, but does not remove one fundamental task: materials must have a known origin.

Why Critical Material Points Are Difficult for MSMEs

A critical point is a material whose halal status depends on its source. Such a material is not automatically halal and not automatically haram. What determines it is what the material is made from and how it is handled.

For large businesses, this question is answered through supplier documents. For MSMEs, that route is often unavailable. Some common reasons:

• Materials are bought in small quantities, often without complete labels or without a halal certificate.
• The supplier is an intermediary trader, so the origin of the material cannot be traced back to the producer.
• The recipe has been in use for a long time and has never been recorded in detail per material.
• MSMEs do not have personnel specifically handling material documents.

As a result, when asked to explain the origin of materials, MSMEs struggle to answer. Not because their product is problematic, but because the information was never documented.

Four Materials That Are Often Overlooked

Several materials appear repeatedly as critical points in MSME products. Four of them:

1. Animal fat and shortening

Solid fat from animals is used for frying and baking. Lard from pigs is among those absolutely not permitted. This material is commonly found in cookies, pastry, donuts, instant noodles, and packaged fried products. The alternatives are palm oil, coconut oil, vegetable margarine, or shortening from halal-certified beef fat.

2. Gelatin capsule shells

Medicine and supplement shells made from gelatin are the critical point most often overlooked. This material is found in prescription and over-the-counter medicines, vitamin supplements, and fish oil in softgel form. The alternatives are vegetable capsules (vegetable capsule or HPMC) or halal-certified bovine gelatin capsules.

3. Stearic acid and magnesium stearate

These anti-caking materials in tablets and powders are listed as E470 and E572. Their source can be palm oil, or animal fat. These materials are used in medicine tablets and supplements, instant drink powders, and solid powder cosmetics. The alternatives are halal-certified vegetable versions, generally from palm oil.

4. Perfume and fragrance materials

Cosmetic fragrances generally have a high alcohol solvent and may contain animal musk. This material is found in perfume, spray deodorant, and scented body care products. The alternatives are non-alcohol perfume or halal-certified synthetic musk.

What MSMEs Can Do

The issue of critical material points is not always solved by replacing materials. Often what is needed first is record-keeping. Steps that can be started:

1. List all materials used, including auxiliary materials in small amounts.
2. Mark materials whose status depends on the source, then find out their origin.
3. Keep labels, packaging, or supplier information for every marked material.
4. For materials that cannot be traced, look for alternatives that are already halal-certified.
5. Update that list whenever there is a new material or supplier.

This record-keeping looks simple, but it becomes the basis for almost every certification process. Without a tidy material list, the halal supervisor will struggle to carry out their duties, and the certification process risks stopping halfway.

The Role of the Inspection Body

The halal inspection of products is carried out by the Halal Inspection Body (LPH). LPH works based on the SNI ISO/IEC 17065:2012 standard, which regulates among other things impartiality, confidentiality, personnel competence, and handling of complaints and appeals. The LPH accreditation guidelines are set out in the Head of BPJPH Decree Number 78 of 2025, which covers requirements, qualifications, scope of competence, fees, application flow, surveillance, and witness assessment.

It should be understood that the determination of halalness is the authority of the MUI Fatwa Commission or the Halal Product Fatwa Committee. Halal certificates are only issued by BPJPH. Therefore, completing documents and tracing materials is not a guarantee of the outcome, but a condition for the process to proceed.

Closing the Gap from the Start

For MSMEs, the biggest obstacle is often not the intention to fulfill the obligation, but the information that was never recorded. Preparing a material list and marking critical points from the start makes the certification process more focused. To help with that record-keeping, IndoHalal.id provides SJPH, a platform that manages halal product assurance system criteria in one application, from material registry, critical point marking, to BPJPH certification readiness.