halal assurance system requirements and documentation in cosmetics industry

Proceeding of International Conference on Halal Issues and Policies 2013 ISBN:

International Conference on Halal Issues and Policies, Makasar, 28 November 2013.

Halal Assurance System Requirements and Documentation in

Cosmetics Industry

Mohd Fuad Mohd Salleh, [email protected]

Rosita [email protected]

Faculty of BusinessUniversiti selangor.

ABSTRACT

The purpose of this paper is to introduce a new framework to optimise the design of halalmanagement in cosmetic industry, called the “Halal Management Model in Cosmetic Industry”. Inthis research the main management processes are defined, which are the determinants for the halalmanagement performance. The focus of this research is to determine the halal assurance systemrequirements and documentation in maintaining halal process, production and certification, thus,increase the confidence level of halal product usage among the end user.

Keywords: halal cosmetics, halal management, halal model, halal certification

Introduction

Many countries are now turning their focus to theword “Halal” as one of the focus in the businessbecause of the awareness of the people. Thevolume of halal business is estimated at USD2.1trillion. As an example, Non-Muslim Dutchconsumers have shown interest in Halal foodwhere the total demand is estimated to reachabout US$3 billion annually; Port of Rotterdamhas a Halal dedicated storage facility; FrenchMuslims spend about 30 to 35 percent of theirincome on food products. Quantity of meatconsumed by Muslims in France amounts to anaverage of 400,000 MT annually. The averageincome of a Muslim in France is about Euro 1,220/month. This is lower than the country’s average atbetween Euro 1,550 and 1,850 per month (HDC,2012).

The word Halal is originated from anArabic phrase that means “permissible” or“lawful” under Islamic Law (Shari`ah). The IslamicLaw is the law that refers to two main sources, Al-

Quran and Sunnah (the teaching and exemplaryconduct of Prophet Muhammad PBUH). Basically,the term halal designates any object or actionwhich is permissible to use or engage in, accordingto Islamic law. The opposite word of Halal isHaram (forbidden) which refers to anything that isprohibited under Islamic law. Muslim all over theworld is facing everyday problem related to theconcept of halal and haram, because the conceptof halal and haram are not only limited to foodproducts, it is covers more than that.

As the halal industry keeps on increasingthe process of getting halal certificate is morechalanging. The ability of certified officers are verylimited. The introduction of Halal AssuranceSystem Requirements and Documentation inCosmetics Industry will reduce the burden ofcertified halal officers and at the same time willincrease the awareness of cosmetics producers ofthe requirements in halal certification.

Halal Industry



Islamic or Halal brand is not a new issue in thehalal market. The exploration of the halal concepttowards branding and business are still in theearly stage and the halal concepts in Islamicbranding have a good potential (Jonathan &Jonathan, 2011). Besides that, the application ofbrand theory unnecessarily restrict to the term ofhalal but it also represent the interpretation of itsmeaning and overall concept of halal in Islam.Instantaneously, halal-conscious customers have ahigh perspective of the halal concept, and theytend to use behavioral traits as a halal-decisionmaking process (Jonathan & Jonathan, 2011;Karijn, et. al. 2007). While in general, Muslim andNon-Muslim customers tent to choose halalproducts or services based on attitude, subjectivenorm and perceived behavioral control (Arshia &Mohsin, 2012; Zainalabidin et al, 2012).

Halal (permissible, lawful) is clearly basedon values, namely Islamic values (Zakaria andAbdul-Talib, 2010). As argued by Lada et al.(2009), Alserhan (2010b), Ibrahim andMokhtarudin (2010), Jonathan & Jonathan (2010)and Tieman (2011), halal needs a supply chainapproach, where the value chain and its supplychain should be fully aligned (Christopher, 1998;van Amstel and van Goor, 2001; van Assen et al.,2010) to fulfil the promise of halal to the end-consumer: that the food they consume is a truemanifestation of Islamic principles (World HalalForum, 2009).

Halal supply chains now are becomingmore complex because of many reasons on theintegrity issues. Lamand Alhashmi (2008) wrotethat halal integrity issues are more likely to occurthan before because of increasing complexity ofsupply chains. Another factor is the focus on costreduction or cost saving in the logistics industry(Jonathan & Jonathan, 2010). To add to thefactors mentioned above, the complexity oftoday’s supply chain makes integrity issues harderto detect (Zakaria, 2008; Shafie and Othman,2004; Talib et al., 2008; Abdul et al., 2009). Theconsequences of halal integrity issues in thesupply chain have arguably becoming more costlythan before for brand owners and retail chains torepair (Waarden and van Dalen, 2010; Zakaria andAbdul-Talib, 2010; New Straits Times, 2005).

Halal supply chains are vulnerable due totheir credence quality attributes (Bonne andVerbeke, 2008), importance of maintaining halal

integrity throughout the supply chain (Tieman,2011; Bahrudin et al., 2011), and sensitivity of theMuslim consumer towards halal (Havinga, 2011,Wilson and Liu, 2010). These vulnerabilities makehalal supply chains complex to design andmanage. These vulnerabilities cannot be reducedthrough conventional supply chain models.Conventional models recognise the importance ofefficiency, but are inadequate for consideringother aspects such as ethics, sustainability andhuman values that are critical for halal supplychains (Milestad et al., 2010).

To ensure the acceptability of anyconsume products there are two importanatcomponents to be looked after – standard andintegrity of standard. In order to achieve or designa goo standard a combination of knowledge andexperience are crucial for Halal Competency.Goverment and organization should give morefocus on Halal Training as it is important forhuman resource development in the Halalindustry. These two factors combined will increasethe integrity of halal products from farm to fork.All of these are important and made possible bycompetent personnel and through halalcertification.

The basic principles of Halal certificationare Halal (permissible) and Thoyyibban (good)taken from Al-Quran, verse 168 Surah Al-Baqarah.Halal is an Arabic word which means allowed orpermitted according to shariah (Islamic) law(Lokman, 2001; Shaikh Mohd, 2006). On the otherhand, Thoyyibban means good quality, safety,cleanliness, nutritious and authentic (ShaikhMohd, 2006, Mariam, 2006). Halal andThoyyibban themselves, portray the symbol ofintolerance in the hygiene, safety and quality. TheHalal certification is issued based on the basicprinciples and procedures thatthe products must be good, safe and fit to beconsumed.

Halal Industries in Malaysia

In 2006, Malaysia took a holistic approach towardshalal because it realized that the halal sectorwould be the new source for the country’seconomic growth. Malaysia planned to be a HalalHub for Asia Region and the state of Selangor hasallocated some huge area, 700 acres, to bedeveloped as Halal Hub in Pulau Indah which was



officially launched in 2003 (Central Spectrum,2012). From 2006 until 2010, Malaysia hassynchronized its strategy on developing halalproducts and services industries. For example in2007, halal training program has started by HalalDevelopment Corporation (HDC), and Malaysiaalso started hosting World Halal forum and WorldHalal Research as an annual event. In 2008, anincentive for Halal Industry has been approved bythe Ministry of Finance, and also Halal IndustryMaster Plan has been approved by the Malaysiancabinet. In 2009, the first World Halal DirectoryWidget was launched by HDC.

Nowadays, Malaysia is respected as aprogressive Islamic and business friendly countryfor both Muslim and Non-Muslim worldcommunities. Besides that, Malaysia is alsostrategically located within the Asian Pacificregion, with potential benefit from the presenceof major areas of production and consumption,and it has create a conducive operatingenvironment, policies and efficient institutionalinfrastructure, to support the development of thehalal industry. These unique criteria giveadvantages to Malaysia in developing andpromoting halal products and industry. For theMalaysia halal industry investment, MalaysianIndustry Development Authority (MIDA) hasreported that during the period 1996-2006, totalapproved investment for food and selected non-food industries amount to RM 10.2 billion, foreigninvestment countries is RM5.2 billion anddomestics investment is RM 5 billion.

Data on Malaysia’s export of processedfood has increased from 1996 to 2005, from RM2.3 billion in 1996 and increase to RM6.5 billion in2005. In the non-food category, export of medicaldevices and pharmaceutical grew at an averageannual rate of 8% and 10.6%. In order to increaseexport of halal products and services, the halalindustries manufacturer in Malaysia are requiredto implement the Malaysia Halal Standard. Halalstandard was established in 2003, and it will beutilized by the appointed halal certification body,the Department of Islamic Development Malaysia(JAKIM) and their Halal Certification scheme(Department of Standard Malaysia, 2008) . UnderJAKIM, there are three types of Malaysian HalalStandards; 1- MS 1900:2005, Quality ManagementSystem-Islamic Perspectives; 2- MS 22200-1:2008,Islamic Consumer Goods-Part1:Cosmetics and

Personal Care – General Guidelines; 3- MS1500:2004, Halal Food-Production , Preparation,Handling and Storage-General Guidelines.

JAKIM is also responsible for issuing thecertification of halal products for export andimport, while the Islamic state government (JAIN)only issues halal certifications for localconsumption. Halal certification refers to theexamination of the processes in its preparation,slaughtering, and cleaning processing, handling,disinfecting, soring, transportation andmanagement practices (Department of StandardMalaysia, 2008) . With the compliance to halalrequirement, manufacturers are obliged to actresponsibly to maintain the halal status of theproducts that they produce.

Cosmetic Industry

Cosmetic and personal care products contribute ahuge amoungt to the world’s economy with thetotal amount of USD269.76 billion (Jamil, 2009).The cosmetic industry in Malaysia is highlycompetitive and very fragmented with numerousdomestic and multinational brands. The domesticcosmetics industry is still a relatively smallindustry in Malaysia (Euromonitor, 2006) andgenerally involves mixing and formulationprocesses, using local and imported ingredients.Consumer spending on personal care productssuch as cosmetics and toiletries grew at a rate ofmore than 40% during the last few years, goingfrom RM1.4 billion in 1995 to RM1.9 billion in2007. Cosmetic and personal care productscontributed about 9 percent of total halal marketin Malaysia.

The Malaysian market for personal careproducts has undergone a number of changes. Inpast years, most Malaysian consumers purchasedonly basic personal care products, such as haircare or bath products. However, as disposableincomes grew during the last few years and asmore products became available in stores andshops, Malaysians began buying a range of newgrooming products and services. Consumersdemand solutions that are specific to theirgrooming needs, and these often include naturalingredients and skin protection and nourishment(Country Market Insight, 2009). In response to agrowing demand for safe cosmetics, bothdomestic and foreign manufacturers have turned



to produce more natural or organic products witha higher market value.The vulnerability of halal supply chains, the largesize and growth of the halal market (Alam andSayuti, 2011; Solsis, 2010) and more stringentrequirements in halal standards, forces brandowners to extend halal towards supply chainmanagement (SCM). Because of the huge numberof end users and the concern on the halal issues,cosmetic industry players are becoming morealert on halal handling.

One of the most important questions thathalal certified food and cosmetics manufacturershave to deal with today is whether and how tostart with halal SCM in protecting the integrity forthe Muslim consumer and protecting their brand.Food manufacturers need a reference on howtodesign and manage halal food and cosmeticssupply chains in order to provide credibility andtrust to the Muslim consumer.

This paper defines the principles in thedesign and management of halal cosmetic supplychains. It introduces the halal supply chain modelas a framework to design and manage halalcosmetic supply chains. This framework is basedon a large discussion group and focus groups andserves to provide the halal industry with practicalguidance on the functional requirements anddesign parameters (Schnetzler et al., 2007) withreference to the halal food supply chains.

Figure 1: Halal Product Flow

The most crucial stage in halal production is theprocess stage whic involve the supply of rawmaterials and the storage. The introduction ofHalal Assurance System Requirements andDocumentation, it will help to educate theproducers or manufacturers to comply with thehalal certification requirements. With the

complete documentation, it will reduce timeneeded by the certification officers to verify theauthenticity of the process. The reduction of timeneeded will speed up the process of certification.

Halal Certification in Malaysia

JAKIM (Islamic Development Department) is thecertification body responsible for granting halalcertification in Malaysia. For the cosmetics andpersonal care products that require halalcertification, the products must comply with theMalaysian standard MS 2200:2008 requirements.According to MS 2200:2008, cosmetic productsmust be safe and non-hazardous to users andconsumers. In brief, the halal cosmetics areproducts that must not have human part ofingredient derived from thereof; not contain anyanimal forbidden to Muslim or are notslaughtered according to Syariah Law; no geneticmodified organism (GMO) which are decreed asnajis; no alcohol from alcoholic drinks (khamar);no contamination from najis during preparation,processing, manufacturing and storage; and safefor consumer (Department of Standard Malaysia,2008). It is also means that the products havecertain quality and meet the requirement ofconsumers in terms of its usage and efficacy.

Generally, cosmetic products in Malaysiaare regulated under the Control of Drugs andCosmetics Regulations 1984. It is under theNational Pharmaceutical Control Bureau (NPCB).NPCB is defined as the National regulation andofficially authorized for cosmetics control. TheBureau is responsible for the registration, licensingand surveillance of all cosmetic products. In 2007,the regulations have been amended according tothe ASEAN Cosmetics Directive (ACD) into theGuideline for Control of Cosmetics Products inMalaysia (Puziah, et al. 2008). According to theguidelines, cosmetics products mean anysubstance or preparation intended to be place incontact with various external parts of the humanbody (epidermis, hair system, nails, lips, andexternal genital organs) or with teeth and mucousmembranes of the oral cavity, with a viewexclusively or mainly to cleaning them, perfumingthem, changing their appearance or correctingbody odors or protecting them in good condition.

In the scope of halal cosmetics, theconcept covers all aspects of management system



























of halal quality, it is not only focusing on theaspect of production including sourcing of halalingredients but all elements must be accounted,such as manufactured procedure, stored packagedand logistics (Mir Mohamad, Alireza, Mehrza,2010; Shambavi et al., 2011). All this must complywith Malaysian halal standard and procedure (MS2200: 2008). Hence, for the halal cosmeticproducts, the formulation and quality of theproducts must totally comply with the Islamicrequirement and follows the requirements ofNational Pharmaceutical Control Bureau, Ministryof Health Malaysia. In every aspect of halal, thetoyyiban aspect is included. Toyyiban is thehighest quality aspect in halal. In fact, the halaland toyyiban can be synonymous with halal high-quality, where the halalan-toyyiban cosmeticsproduct is clean, pure, nutritious, hygienic andhealthy.

Conclusion

Based on the current practice of certification,producers of cosmetic products are not easy todetermine the acceptability or halal status of theproducts. It is important to prepare thedocumentation process that will help theproducers to determine the acceptability or halalstatus of the products. With the introduction ofHalal Assurance System Requirements andDocumentation in Cosmetics Industry, it willreduce the time needed by the certified officer togo through the halal process certification. By thereduction of time needed, the number of halalcertificate produced will be increased. With halalcertificate it will surely increase the acceptbility ofthe product, not only by the Muslim, but non-Muslim as well.

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halal assurance system requirements and documentation in cosmetics industry

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