The
definitions of Halal, while generally agreed upon by Muslims, display
significant gaps when it comes to their application in the industry.
Due to differing Halal standards not only between countries but also
within each individual country (following the presence of various Halal
authorities), confusion, misunderstanding and even abuse in the Halal
audit and certification process have occurred. As a result, supply
chains have been broken whilst artificial shortages of raw material
have emerged as a result of disunity between Halal certification bodies.
There
are plenty at stake for the industry. The loss of Halal status can
easily translate into significant loss of revenue for Halal
manufacturers and producers. A case in point is the recent delisting of
Australian and New Zealand Halal meat producers by JAKIM in Malaysia.
It was reported that the combined loss of exports amounted to US$53
million!
Industry
players are certainly the ones who best understand the impact of not
having uniformity in the application of Halal standards. According to
the World Halal Forum chairman Khairy Jamaluddin, one of the reasons
why the Halal industry cannot grow faster, despite rising demands for
Halal products worldwide, is because there is no consensus on a Halal
standard. Each country has its own certification body, which leads to
disagreements over animal feed, slaughtering methods, packaging,
logistics and other arising issues.
Indeed,
all sectors of the market from inter-government agencies to the
smallest trader have recognised the need for one global Halal standard
that is recognised by all importing countries. However, for this to be
achieved, there are varying views that need to be sorted out.
Different
Halal authorities follow different Islamic rulings regarding issues
such as gelatine, food flavourings, animal enzymes, phosphates,
mechanical slaughter, stunning of animals and the usage of thoracic
stick. This sometimes creates confusion for producers who may not know
which authority to consult in order to get their products certified for
the right market.
While
the industry welcomes the idea of establishing a global Halal standard,
certification authorities may on the contrary feel that it can thin out
the integrity of each Halal certifying body, including JAKIM’s.
The
World Halal Council WHC, established in December 1999 for instance, has
spent several years working towards an international Halal
certification standard. The council, which is comprised of Halal
certifiers from around the world, is currently working through ‘thorny
issues’ and controversial topics pertaining Halal dietary laws.
Amidst
the growing number of agencies issuing Halal certificates, there is
also an increasing trend for local government departments to take
charge of Halal certification as a result of the increasing demand for
the export of Halal goods.
The
governments of Malaysia, Thailand, Indonesia, Singapore and the
Philippines, for example, have established institutions specifically
for Halal certification. Given the increasing involvement of
governments in Halal certification, it would ultimately be difficult
for countries to collectively agree on a global Halal standard as it
would mean surrendering their sovereign rights.
Figure 1: Minimum Core (Non Negotiable) Standard with Addendums
Source: M’Nasria, H. (2007) Challenges for Multinationals in the Global Halal Market, presentation delivered at the World Halal Forum, Kuala Lumpur, 7-8 May.
If
certification agencies cannot agree on one Halal standard, then how do
we find a middle ground This was one of the questions raised during the
recent World Halal Forum 2007.
Dr.
Habib M’Nasria, Zone Quality Assurance Director at McDonald’s
International, suggested the establishment of a Minimum Core Standard
carrying zero tolerance for a few basic issues (like pork and alcohol)
with addendums applied to each individual country (as shown in Figure
1).
The
addendums, for example, would clearly list out countries that permit
electrical stunning on animals prior to Halal slaughter (such as
Malaysia, Indonesia and Thailand). Unfortunately, given that some
countries do not even have a national Halal standard, let alone
statutory regulations pertaining Halal, it would expectedly be
difficult to globally implement the standards proposed by Dr. Habib.
As
mentioned above, Halal certification is carried out not only by local
government authorities but also by various Islamic centres and
organisations which further complicate matters. There are bodies that
do not recognise the other’s certification because each would follow
their own guidelines and interpretation of the Holy Qur’an and Hadith.
In
countries like the UK, for example, there are over 20 different Halal
certification bodies in operation. Some of them permit the use of
electrical stunning while others like the Halal Monitoring Committee
and the Muslim Council of Britain firmly reject such practice.
Creating
one standard for the Halal food industry through a general open-for-all
certification scheme would be extremely difficult because one standard
will not meet the needs of all certification bodies. Another speaker at
the World Halal Forum 2007, Dr. Jochen Zoller, who is the Global
Director for Food Services, Intertek Testing Holdings Germany,
suggested that “we should set up a Halal benchmark with an independent
third party certification body, like the BRC.” He also added that “if
we use ISO, it will take us forever.”
The
BRC, or British Retail Consortium – a leading trade association in the
UK, represents all forms of retailers from small independently owned
stores to big departmental chain stores. In the UK, under the Food
Safety Act 1990, retailers or brand owners have a legal responsibility
for the products under their own labels. However, they must also
grapple with a variety of different certification systems that exist
worldwide following several food crises and the increasing demand for
high quality food products.
The
BRC, in 1998, subsequently undertook the initiative to harmonise retail
standards by introducing the Food Technical Standard to evaluate
whether manufacturers fulfil the requirements of retailers who
sub-contract the manufacturing of products under their own brand name.
The standard requires tight controls over the processes in which the
products are produced, so that with a BRC certificate, manufacturers
are able to satisfy all British supermarkets’ demand at once.
In
recent years, the number of certification standards established by
private institutions like the BRC (as shown in Table 1), has increased
worldwide in the agri-business or food industry. Indeed, food safety
and quality standards established by private institutions are today
becoming the predominant drivers of agri-food systems although
traditionally such standards were the preserve of government
regulation.
Privately-owned
standards, which are also becoming a primary determinant of market
access in selected industrial countries, are fast becoming a global
phenomenon and are even pervading the agri-food markets of many
developing countries.
The IHI Alliance: The Vehicle to Harmonise All Halal Standards
There
is an urgent need to reduce the problems created by the plethora of
Halal standards and much can be learned from the trends to harmonise
food safety and quality standards in developed Western countries. The
Halal industry is now worth billions but there are still no
international standards and best practices, making it a complex area to
navigate for companies trading Halal goods globally.
Additionally,
according to Nestle’s Othman Mohd Yusof, “with increasing trade
barriers, regulatory impediments and food safety standards, the need
for a premium global standard is crucial”. If Halal is to penetrate the
mainstream market and gain access to global consumers, the standards
for Halal producers must also be raised. Moreover, the nature of Halal
requires rigorous certification.
Following
a resolution that was passed at the World Halal Forum in 2006, the
International Halal Integrity (IHI) Alliance was formed recently at the
WHF 2007. As a non-profit, non-governmental and non-national body, it
“aims to provide a platform for its members to share information and
work towards upholding the integrity of the Halal industry; to provide
a communication channel for its members with relevant parties; and to
strengthen the Halal industry to fulfil its highest potential (World
Halal Forum: The Executive Review 2007, p.30).
Harmonisation
that comes through the IHI Alliance will help develop Halal standards
that are acceptable globally and that will facilitate global trade so
that both consumers and retailers would be able to get the right
quality of products.
An
all-encompassing Halal standard and a harmonised Halal certification
system worldwide would also “help industries to expedite product
development, assuring the consumers, reducing the number of multiple
certifications and thereby compressing the supply chain cycle time”
(Kamarul Aznam 2006, p.2). The new Halal guidelines and certification
system will therefore be suitable not only for the Muslims but also
global consumers at large.
The
success of the IHI Alliance will largely depend on the stakeholders of
the non-Muslim business community throughout the value chain. With
their support, the IHI Alliance will serve to protect the interests of
both the industry and consumers, apart from ensuring the integrity of
Halal products around the world.
