Indonesia, a sprawling archipelago of over 13,000 islands, is known as the emerald of the equator due to its vast and beautiful forest landscapes.
Beauty is intrinsic to its population of nearly 270 million inhabitants as the country’s booming cosmetics industry continues to grow thanks largely its rising middle-classes.
Home to world’s largest Muslim population, Indonesia is gearing up for huge sea change with the implementation of the country’s new Halal Product Assurance (HPA) Law on October 17, 2019. Manufacturers are keeping their eyes on this date as the new law will make it mandatory for all food, beverage, drug, cosmetic, chemical (used for human consumption) and organic and genetically modified products sold in Indonesia to be Halal certified.
With the clock counting down, companies producing raw materials or formulations for cosmetic products for sale in Indonesia only have a short time remaining to ensure their products can abide by this new law. From my perspective in global regulatory affairs, I believe there are several points companies should consider ahead of this looming deadline.
Once the law is effective, manufacturers must be able to prove that the raw materials used in their products, as well as the equipment and production processes used to develop those products are Halal compliant.
There are two reference guides to be aware of: The Halal Positive List and the Halal Negative List. All materials in the positive list do not require Halal certification providing they do not contain any added salt or additional ingredients. Items such as minerals, some organic and inorganic chemicals, aquatic animals and microbial fermented products are included, whereas items like pure honey, fresh milk and fresh eggs can be included by only under this provision. All materials in the negative list cannot be certified and are classed as strictly “haram” (prohibited).
These items must be pure and must not contain any added ingredients or salt. From now until the deadline, the Indonesian government is scheduled to release a series of regulations to direct the implementation of the new law.
Due to the different standards and regulations across markets, the challenge will be to ensure that products that have been previously Halal certified in other countries are also accepted in Indonesia. Products from overseas with Halal certifications may be acknowledged in Indonesia, however, the acknowledgment does not automatically guarantee compliance in Indonesia and will be subject to the cooperation between the concerned country’s certification bodies.
Although products can be recognized as having been certified in another country, harmonizing the compliance of the product between the regulation in the original country and in Indonesia is a complex process and subject to a case-by-case assessment. Companies importing cosmetic ingredients and formulations therefore need to proceed with caution and be well prepared in the event of a difficult outcome.
Despite the anxiety surrounding the impending deadline, there are plenty of opportunities for cosmetics producers to tap into this lucrative and growing market. With Euromonitor projecting the cosmetic and beauty products market in Indonesia to exceed IDR 120 billion by 2022, being able to prove you are Halal compliant will be essential to market penetration and success.
The new Halal regulation in Indonesia is not a threat but requires careful and diligent preparedness. One option is to work with an established regulatory specialist like DKSH who can support your business to meet all the requirements and regulations of the new law.
Do share any concerns and challenges you may have in accessing the Indonesian cosmetics market.