Legal Updates for October 2023

With Law No. 17 of 2023, Indonesia's Healthcare Sector is Finally Getting the Attention that it Deserves

The second semester of 2023 continued to be an active year in the Indonesian legal landscape. After revamping the financial landscape, the Indonesian government moved on to tackle issues in the nation’s healthcare sector by issuing the so-called "Omnibus Health Law" (Law No. 17 of 2023 on Health) in August 2023.

The urgency for the transformation of Indonesia's healthcare system was underscored by the impact of the COVID-19 pandemic, which unveiled the vulnerabilities and inadequacies of the healthcare systems globally, including in Indonesia. With healthcare often being overlooked in favour of other, more pressing reforms, the pandemic highlighted the weakness in Indonesia’s healthcare system, for example, the lack of public health facilities, shortage of health workforce, and overlapping of laws and regulations.

Countdown to Mandatory Halal Certification: One Year to Go

Law No. 33 of 2014 on Halal Product Assurance ("Law") requires products entering, circulating, and being traded in Indonesia to be accompanied by a halal certificate. Despite the introduction of this requirement in 2014, the Law allows for a gradual implementation starting next year. Generally, there are two equally important implications that arise from the halal certificate obligation:

  1. The requirement for a party to obtain a halal certificate for its products; and
  2. The requirement that products containing ingredients classified as prohibited (haram) contain a non-halal remark. These products include items such as pork and its derivatives, alcoholic drinks, products containing blood or blood products, and animal products that were not slaughtered based on syariah principles.

Because the obligation to obtain a halal certificate is implemented in stages, business can still sell products without a halal certificate or a non-halal remark. Government Regulation No. 39 of 2021 on the Implementation of the Halal Product Assurance ("Government Regulation") sets out various deadlines to obtain the halal certificate, which depend on the categories of the goods and services. The earliest deadline of 17 October 2024 applies to food and beverage products, as well as their related products or services. This means that starting from 17 October 2024, the following goods and services must either have a halal certificate or be marked as non-halal:

  1. Food and beverage products;
  2. Raw materials, food additives and auxiliary materials for food and beverage products;
  3. Slaughtered products and their related services; and
  4. Related services, such as those pertaining to the processing, storage, packaging, distribution, sales and serving of the goods.

Failure to comply with the obligation for halal certification will result in administrative sanctions, ranging from written warning, fine, to a recall of the products.

Since the enactment of the Government Regulation, the government has actively endorsed the halal certification program through various methods. In March 2022, the Halal Product Assurance Administering Agency or Badan Penyelenggara Jaminan Produk Halal ("BPJPH"), initiated the 10 Million Halal Certified Products Program. According to the BPJPH’s data, as of 2023, approximately 2.7 million halal-certified products have been registered with the BPJPH. About 450 thousand products are in the process of obtaining halal certificates, and nearly 1.5 million are in the registration bay for the halal certificate. In light of the halal certificate becoming mandatory starting 2024, the BPJPH has inaugurated 55 Halal Inspection Bodies or Lembaga Pemeriksa Halal (LPH for short), and received approximately 100 requests for cooperation from foreign halal agencies.