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

Halal Assurance System Requirements and Documentation in Cosmetics Industry


Mohd Fuad Mohd Salleh, PhD
fuadsalleh@unisel.edu.my

Rosita Hussin rosita@unisel.edu.my Faculty of Business Universiti selangor. ABSTRACT


The purpose of this paper is to introduce a new framework to optimise the design of halal management in cosmetic industry, called the Halal Management Model in Cosmetic Industry. In this research the main management processes are dened, which are the determinants for the halal management performance. The focus of this research is to determine the halal assurance system requirements 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 the word Halal as one of the focus in the business because of the awareness of the people. The volume of halal business is estimated at USD2.1 trillion. As an example, Non-Muslim Dutch consumers have shown interest in Halal food where the total demand is estimated to reach about US$3 billion annually; Port of Rotterdam has a Halal dedicated storage facility; French Muslims spend about 30 to 35 percent of their income on food products. Quantity of meat consumed by Muslims in France amounts to an average of 400,000 MT annually. The average income of a Muslim in France is about Euro 1,220/ month. This is lower than the countrys average at between Euro 1,550 and 1,850 per month (HDC, 2012). The word Halal is originated from an Arabic phrase that means permissible or lawful under Islamic Law (Shari`ah). The Islamic Law is the law that refers to two main sources, Al-

Quran and Sunnah (the teaching and exemplary conduct of Prophet Muhammad PBUH). Basically, the term halal designates any object or action which is permissible to use or engage in, according to Islamic law. The opposite word of Halal is Haram (forbidden) which refers to anything that is prohibited under Islamic law. Muslim all over the world is facing everyday problem related to the concept of halal and haram, because the concept of halal and haram are not only limited to food products, it is covers more than that. As the halal industry keeps on increasing the process of getting halal certificate is more chalanging. The ability of certified officers are very limited. The introduction of Halal Assurance System Requirements and Documentation in Cosmetics Industry will reduce the burden of certified halal officers and at the same time will increase the awareness of cosmetics producers of the requirements in halal certification. Halal Industry

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

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

Islamic or Halal brand is not a new issue in the halal market. The exploration of the halal concept towards branding and business are still in the early stage and the halal concepts in Islamic branding have a good potential (Jonathan & Jonathan, 2011). Besides that, the application of brand theory unnecessarily restrict to the term of halal but it also represent the interpretation of its meaning and overall concept of halal in Islam. Instantaneously, halal-conscious customers have a high perspective of the halal concept, and they tend to use behavioral traits as a halal-decision making process (Jonathan & Jonathan, 2011; Karijn, et. al. 2007). While in general, Muslim and Non-Muslim customers tent to choose halal products or services based on attitude, subjective norm and perceived behavioral control (Arshia & Mohsin, 2012; Zainalabidin et al, 2012). Halal (permissible, lawful) is clearly based on values, namely Islamic values (Zakaria and Abdul-Talib, 2010). As argued by Lada et al. (2009), Alserhan (2010b), Ibrahim and Mokhtarudin (2010), Jonathan & Jonathan (2010) and Tieman (2011), halal needs a supply chain approach, where the value chain and its supply chain should be fully aligned (Christopher, 1998; van Amstel and van Goor, 2001; van Assen et al., 2010) to full the promise of halal to the end consumer: that the food they consume is a true manifestation of Islamic principles (World Halal Forum, 2009). Halal supply chains now are becoming more complex because of many reasons on the integrity issues. Lamand Alhashmi (2008) wrote that halal integrity issues are more likely to occur than before because of increasing complexity of supply chains. Another factor is the focus on cost reduction or cost saving in the logistics industry (Jonathan & Jonathan, 2010). To add to the factors mentioned above, the complexity of todays supply chain makes integrity issues harder to detect (Zakaria, 2008; Shae and Othman, 2004; Talib et al., 2008; Abdul et al., 2009). The consequences of halal integrity issues in the supply chain have arguably becoming more costly than before for brand owners and retail chains to repair (Waarden and van Dalen, 2010; Zakaria and Abdul-Talib, 2010; New Straits Times, 2005). Halal supply chains are vulnerable due to their credence quality attributes (Bonne and Verbeke, 2008), importance of maintaining halal

integrity throughout the supply chain (Tieman, 2011; Bahrudin et al., 2011), and sensitivity of the Muslim consumer towards halal (Havinga, 2011, Wilson and Liu, 2010). These vulnerabilities make halal supply chains complex to design and manage. These vulnerabilities cannot be reduced through conventional supply chain models. Conventional models recognise the importance of efciency, but are inadequate for considering other aspects such as ethics, sustainability and human values that are critical for halal supply chains (Milestad et al., 2010). To ensure the acceptability of any consume products there are two importanat components to be looked after standard and integrity of standard. In order to achieve or design a goo standard a combination of knowledge and experience are crucial for Halal Competency. Goverment and organization should give more focus on Halal Training as it is important for human resource development in the Halal industry. These two factors combined will increase the integrity of halal products from farm to fork. All of these are important and made possible by competent personnel and through halal certification. The basic principles of Halal certification are Halal (permissible) and Thoyyibban (good) taken from Al-Quran, verse 168 Surah Al-Baqarah. Halal is an Arabic word which means allowed or permitted according to shariah (Islamic) law (Lokman, 2001; Shaikh Mohd, 2006). On the other hand, Thoyyibban means good quality, safety, cleanliness, nutritious and authentic (Shaikh Mohd, 2006, Mariam, 2006). Halal and Thoyyibban themselves, portray the symbol of intolerance in the hygiene, safety and quality. The Halal certification is issued based on the basic principles and procedures that the products must be good, safe and fit to be consumed. Halal Industries in Malaysia In 2006, Malaysia took a holistic approach towards halal because it realized that the halal sector would be the new source for the countrys economic growth. Malaysia planned to be a Halal Hub for Asia Region and the state of Selangor has allocated some huge area, 700 acres, to be developed as Halal Hub in Pulau Indah which was

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

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

officially launched in 2003 (Central Spectrum, 2012). From 2006 until 2010, Malaysia has synchronized its strategy on developing halal products and services industries. For example in 2007, halal training program has started by Halal Development Corporation (HDC), and Malaysia also started hosting World Halal forum and World Halal Research as an annual event. In 2008, an incentive for Halal Industry has been approved by the Ministry of Finance, and also Halal Industry Master Plan has been approved by the Malaysian cabinet. In 2009, the first World Halal Directory Widget was launched by HDC. Nowadays, Malaysia is respected as a progressive Islamic and business friendly country for both Muslim and Non-Muslim world communities. Besides that, Malaysia is also strategically located within the Asian Pacific region, with potential benefit from the presence of major areas of production and consumption, and it has create a conducive operating environment, policies and efficient institutional infrastructure, to support the development of the halal industry. These unique criteria give advantages to Malaysia in developing and promoting halal products and industry. For the Malaysia halal industry investment, Malaysian Industry Development Authority (MIDA) has reported that during the period 1996-2006, total approved investment for food and selected nonfood industries amount to RM 10.2 billion, foreign investment countries is RM5.2 billion and domestics investment is RM 5 billion. Data on Malaysias export of processed food has increased from 1996 to 2005, from RM 2.3 billion in 1996 and increase to RM6.5 billion in 2005. In the non-food category, export of medical devices and pharmaceutical grew at an average annual rate of 8% and 10.6%. In order to increase export of halal products and services, the halal industries manufacturer in Malaysia are required to implement the Malaysia Halal Standard. Halal standard was established in 2003, and it will be utilized by the appointed halal certification body, the Department of Islamic Development Malaysia (JAKIM) and their Halal Certification scheme (Department of Standard Malaysia, 2008) . Under JAKIM, there are three types of Malaysian Halal Standards; 1- MS 1900:2005, Quality Management System-Islamic Perspectives; 2- MS 22200-1:2008, Islamic Consumer Goods-Part1:Cosmetics and

Personal Care General Guidelines; 3- MS 1500:2004, Halal Food-Production , Preparation, Handling and Storage-General Guidelines. JAKIM is also responsible for issuing the certification of halal products for export and import, while the Islamic state government (JAIN) only issues halal certifications for local consumption. Halal certification refers to the examination of the processes in its preparation, slaughtering, and cleaning processing, handling, disinfecting, soring, transportation and management practices (Department of Standard Malaysia, 2008) . With the compliance to halal requirement, manufacturers are obliged to act responsibly to maintain the halal status of the products that they produce. Cosmetic Industry Cosmetic and personal care products contribute a huge amoungt to the worlds economy with the total amount of USD269.76 billion (Jamil, 2009). The cosmetic industry in Malaysia is highly competitive and very fragmented with numerous domestic and multinational brands. The domestic cosmetics industry is still a relatively small industry in Malaysia (Euromonitor, 2006) and generally involves mixing and formulation processes, using local and imported ingredients. Consumer spending on personal care products such as cosmetics and toiletries grew at a rate of more than 40% during the last few years, going from RM1.4 billion in 1995 to RM1.9 billion in 2007. Cosmetic and personal care products contributed about 9 percent of total halal market in Malaysia. The Malaysian market for personal care products has undergone a number of changes. In past years, most Malaysian consumers purchased only basic personal care products, such as hair care or bath products. However, as disposable incomes grew during the last few years and as more products became available in stores and shops, Malaysians began buying a range of new grooming products and services. Consumers demand solutions that are specific to their grooming needs, and these often include natural ingredients and skin protection and nourishment (Country Market Insight, 2009). In response to a growing demand for safe cosmetics, both domestic and foreign manufacturers have turned

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

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

to produce more natural or organic products with a higher market value. The vulnerability of halal supply chains, the large size and growth of the halal market (Alam and Sayuti, 2011; Solsis, 2010) and more stringent requirements in halal standards, forces brand owners to extend halal towards supply chain management (SCM). Because of the huge number of end users and the concern on the halal issues, cosmetic industry players are becoming more alert on halal handling. One of the most important questions that halal certied food and cosmetics manufacturers have to deal with today is whether and how to start with halal SCM in protecting the integrity for the Muslim consumer and protecting their brand. Food manufacturers need a reference on howto design and manage halal food and cosmetics supply chains in order to provide credibility and trust to the Muslim consumer. This paper denes the principles in the design and management of halal cosmetic supply chains. It introduces the halal supply chain model as a framework to design and manage halal cosmetic supply chains. This framework is based on a large discussion group and focus groups and serves to provide the halal industry with practical guidance on the functional requirements and design parameters (Schnetzler et al., 2007) with reference to the halal food supply chains.

complete documentation, it will reduce time needed by the certification officers to verify the authenticity of the process. The reduction of time needed will speed up the process of certification. Halal Certification in Malaysia JAKIM (Islamic Development Department) is the certification body responsible for granting halal certification in Malaysia. For the cosmetics and personal care products that require halal certification, the products must comply with the Malaysian standard MS 2200:2008 requirements. According to MS 2200:2008, cosmetic products must be safe and non-hazardous to users and consumers. In brief, the halal cosmetics are products that must not have human part of ingredient derived from thereof; not contain any animal forbidden to Muslim or are not slaughtered according to Syariah Law; no genetic modified organism (GMO) which are decreed as najis; no alcohol from alcoholic drinks (khamar); no contamination from najis during preparation, processing, manufacturing and storage; and safe for consumer (Department of Standard Malaysia, 2008). It is also means that the products have certain quality and meet the requirement of consumers in terms of its usage and efficacy. Generally, cosmetic products in Malaysia are regulated under the Control of Drugs and Cosmetics Regulations 1984. It is under the National Pharmaceutical Control Bureau (NPCB). NPCB is defined as the National regulation and officially authorized for cosmetics control. The Bureau is responsible for the registration, licensing and surveillance of all cosmetic products. In 2007, the regulations have been amended according to the ASEAN Cosmetics Directive (ACD) into the Guideline for Control of Cosmetics Products in Malaysia (Puziah, et al. 2008). According to the guidelines, cosmetics products mean any substance or preparation intended to be place in contact with various external parts of the human body (epidermis, hair system, nails, lips, and external genital organs) or with teeth and mucous membranes of the oral cavity, with a view exclusively or mainly to cleaning them, perfuming them, changing their appearance or correcting body odors or protecting them in good condition. In the scope of halal cosmetics, the concept covers all aspects of management system

Figure 1: Halal Product Flow The most crucial stage in halal production is the process stage whic involve the supply of raw materials and the storage. The introduction of Halal Assurance System Requirements and Documentation, it will help to educate the producers or manufacturers to comply with the halal certification requirements. With the

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

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

of halal quality, it is not only focusing on the aspect of production including sourcing of halal ingredients but all elements must be accounted, such as manufactured procedure, stored packaged and logistics (Mir Mohamad, Alireza, Mehrza, 2010; Shambavi et al., 2011). All this must comply with Malaysian halal standard and procedure (MS 2200: 2008). Hence, for the halal cosmetic products, the formulation and quality of the products must totally comply with the Islamic requirement and follows the requirements of National Pharmaceutical Control Bureau, Ministry of Health Malaysia. In every aspect of halal, the toyyiban aspect is included. Toyyiban is the highest quality aspect in halal. In fact, the halal and toyyiban can be synonymous with halal highquality, where the halalan-toyyiban cosmetics product is clean, pure, nutritious, hygienic and healthy. Conclusion Based on the current practice of certification, producers of cosmetic products are not easy to determine the acceptability or halal status of the products. It is important to prepare the documentation process that will help the producers to determine the acceptability or halal status of the products. With the introduction of Halal Assurance System Requirements and Documentation in Cosmetics Industry, it will reduce the time needed by the certified officer to go through the halal process certification. By the reduction of time needed, the number of halal certificate produced will be increased. With halal certificate it will surely increase the acceptbility of the product, not only by the Muslim, but nonMuslim as well.

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

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

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