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Dateline Southeast Asia: Halal

Mindanao eyes US Islamic trade, though it must first tailor standards

By RJ Whitehead , 13-Apr-2017

© iStock
© iStock

The Autonomous Region in Muslim Mindanao’s advance on the global halal market continues as it prepares to sign an agreement with Islamic authorities in America.

A delegation of the ARMM, which represents a group of mostly Muslim provinces in the south of the Philippines, recently attended a forum in Washington at which it was advised by officials of the US Halal Chamber of Commerce on how to tap into business opportunities in the country.

According to the region’s official press service, the USHCC’s chief executive, Habib Ghanim, has offered support to the body and could possibly sign an agreement with it to promote halal exports as early as October, with shipments originating largely from a designated economic zone in Parang which was dubbed a “halal hub” earlier this year by the ARMM’s governor.

The zone’s executive director, Aleem Siddiqui Guiapal, who was part of the Washington delegation, warned though that the Filipino halal industry needed to address several barriers before it could successfully export to America and other countries on a substantial scale.

We have to… reach a consensus on certification requirements that avoids confusing, contradictory and costly requirements,” he said, adding that standards need to be put in place beforehand to “protect the integrity of halal certification in order to avoid a loss of confidence by consumers”.

He also called for health and safety claims to be “based on science and not on shariah alone”, and acknowledged that the region needs to do more homework before it can understand overseas halal markets.

Two bodies govern halal certification in the southern region, the Muslim Mindanao Halal Certification Board and the Halal International Chamber of Commerce and Industries of the Philippines. 

In October 2015, they signed an agreement to strengthen their standards for the local market, but more integration is needed before these can be accepted in global markets.

America currently accounts for about 12% of the world’s US$2.8tr halal trade in food and agriculture sales.

Elsewhere, Malaysia is planning a unified halal certification system with Indonesia, which currently only allows the import of industrial goods carrying the Malaysian halal standards, including palm oil.

Imports of consumer goods must be tested by Indonesian Islamic authorities individually before they can gain a halal logo from the Indonesian Food and Drug Monitoring Agency.

We have been collaborating very closely because we want to sell more products to Indonesia and, of course, we also welcome Indonesian products in Malaysia,” Malaysia’s International Trade and Industry said.

Some challenges have not been resolved. Indonesian authorities recognise our halal certification, but there are some additional tests that our people have to go through,” Mustapa Mohamed told reporters.

The Indonesian Ulema Council, which grants halal certificates, said integration was doable. Speaking to The Jakarta Post, the deputy director of its food and drug analysis agency said the need to conduct on-site audits of producers might not be necessary.

Instead, we can just audit the documents of those products. Nonetheless, this plan has yet to be officially agreed to,” Muti Arintawati said.

Official figures show that trade between the two countries has fallen by almost US$10bn since 2013 to US$14.3bn last year. Malaysia’s prime minister, Najib Razak, said last year that he was committed to doubling this figure “in the near future”.

The lack of a single standard is stymieing the global halal trade, Malaysia’s deputy prime minister, Ahmed Zahid Hamidi.

With “more than 200 certification bodies around the world, issuing their own halal certificates and logos”, Zahid urged nations to “foster mutual recognition of each other’s certification”. 

I sincerely hope we will look into this possible solution seriously,” he said at the opening of a halal trade show in Malaysia’s capital last week.

The lack of a single unified standard was a challenge, he said, adding that Malaysia was now nearing the implementation of its Halal Industry Master Plan, which focuses on broadening the access of homegrown companies in the international halal trade.

Zahid also revealed that “a number of Arab countries” had expressed interest in developing halal partnerships with Malaysia.

It is expected that Malaysia’s annual halal exports will exceed US$11.3bn by 2020.

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