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Halal
How is the halal certification certification
policy implemented? Perspective policy

analysis of small and medium


enterprises (SMEs) in Indonesia
Wahyudin Darmalaksana Received 19 December 2022
Revised 27 February 2023
Faculty of Ushuluddin, UIN Sunan Gunung Djati Bandung, Bandung, Indonesia 3 May 2023
24 July 2023
26 October 2023
Accepted 9 November 2023
Abstract
Purpose – This study aims to explore small and medium enterprises (SMEs) acceptance of the halal
certification policy in Indonesia, aiming to understand their perspectives and characteristics, as well as the
primary considerations of business actors in implementing the policy. This study seeks to provide a
comprehensive understanding of SME actors’ views toward halal certification policies, which is crucial for
strengthening the government’s efforts in building a robust halal system and creating awareness in the
community.
Design/methodology/approach – This study uses a mixed method. This study uses a random
sampling technique on SMEs in Bandung, Indonesia. A total of 400 respondents participated in filling out the
study questionnaire. Meanwhile, five SME actors were interviewed to gain deeper insight into the topic of this
study. The data analysis technique used descriptive analysis and verification with confirmatory factor
analysis.
Findings – The results of the study indicate that the halal certification policy is generally accepted by
business actors, but there are criticisms regarding knowledge and information about halal certification. Halal
awareness and perceived effectivity have the highest acceptance scores, while halal knowledge and
information, religious behavior, individual background, and personal and social aims have the lowest scores.
All acceptance indicators meet the criteria of a good fit model, with system indicators having a greater impact.
Acceptance is based not only on theological–religious considerations but also on pragmatic considerations
related to business operations.
Research limitations/implications – This study has several limitations that should be considered.
First, the topics and variables studied are focused only on the dimensions of acceptance of the halal
certification policy. It would be more comprehensive if integrated with other variables in correlational and
implicative studies. Second, the measurement model used in this study is modified from the policy
acceptance model, which focuses on normative and systemic aspects of the policy without considering
theological values of the halal certification policy. A more complex model is required to measure the
acceptance of a comprehensive halal certification policy that considers both normative and theological
aspects.
Practical implications – The implications of this study are as follows: First, the implementation of the
halal certification policy must take into account the various indicators of policy acceptance, particularly from
the business actors who are responsible for implementing the policy. Second, the implementation of the halal
certification policy must also take into account the heterogeneous characteristics of the business actors. Third,
the certification policy should focus on two critical indicators, namely, halal awareness and the perceived
effectivity of policy implementation, which can be reinforced by other indicators.

The author wishes to thank Prof Dr Fatoni, M.Ag, who has provided important suggestions in the
preparation of this manuscript.
Funding: This research received no specific grant from any funding agency in the public,
Journal of Islamic Accounting and
commercial or not-for-profit sectors. Business Research
Author contributions: The author alone is responsible for all the works in this study. © Emerald Publishing Limited
1759-0817
Disclosure statement: The author declares that there is no conflict of interest in this study. DOI 10.1108/JIABR-12-2022-0342
JIABR Social implications – The results of this study confirm that the government must take into account the
response of business actors to ensure the effectiveness of implementing the halal certification policy. The
government can take an important step in this regard by conducting a survey of business actors who have
participated in the halal certification program to understand the benefits and satisfaction they receive from
the policy and identify the factors that hinder them from accepting the halal certification policy.
Originality/value – This study highlights the response of SME actors regarding the acceptance of the
halal certification policy. This study provides a new perspective regarding the acceptance of SMEs toward
halal certification policies that are important for future implementation.
Keywords Confirmatory factor analysis, Halal certification policy, Halal system, Islamic teaching,
Policy acceptance, SMEs
Paper type Research paper

1. Introduction
The number of Muslims worldwide is increasing every year. According to reports by
Mastercard and Crescent Rating, by 2022, the world’s Muslim population will reach two
billion people spread across 200 countries, with 67% in the Asian Region (Annur, 2022).
This growth in population results in a substantial demand for halal products, which will
consequently stimulate the growth of the halal industry and increase the supply of halal
certificates. The State of the Global Islamic Economy Report in 2022 estimated that the
total expenditure of global Muslims would increase by 9.1% in six real sectors of the
sharia economy, including the halal food and beverage sector, modest fashion, cosmetics,
pharmaceuticals, media and recreation and travel. This growth is expected to reach US
$2.8tn by 2025, representing an increase of 7.5% compounded annual growth rate
(CAGR).
The concept of halal is an absolute key in product consumption for Muslims (Khan
and Haleem, 2016). Muslims are responsible for following the norms and values given by
the Qur’an and Hadith as best as possible in their daily lives (Esfahani and Shahnazari,
2013), including in consuming halal products. Meanwhile, non-Muslim consumers
consume halal products mainly because of the halal process that ensures safety,
nutrition, hygiene and quality (Omar and Jaafar, 2011; Suleman et al., 2021) and can
reduce the risk of contamination (Ambali and Bakar, 2013). The halal concept is
limited to the food consumed and the halal denotation issued to other nonfood segments,
such as processing, packaging, storage and delivery (Burgmann, 2007; Indarti and
Anggadwita, 2022).
The halal certification certifies products or services following Sharia law to assure
Muslim consumers of halal quality (Noordin et al., 2014). The Halal certification and
verification system is a crucial identifier of Halal-compliant products. Despite efforts to have
organizations such as the Muslim Consumer Group certify food goods as Halal, there is no
uniform global halal standard (Noordin et al., 2014). There is no worldwide authority on
halal and trademark consistency, and more than 15 Halal logos are on the market, although
international harmonization efforts have been initiated (Minkus-McKenna, 2007).
Indonesia, with its majority Muslim population, has a significant potential for the sharia
economy. According to data from the Ministry of Home Affairs (2021), as of December 31,
2021, the Muslim population in Indonesia reached 237.53 million people, accounting for
86.9% of the total population. The Indonesia Halal Market Reports 2021/2022 also shows
that the sharia economy has the potential to contribute up to US$5.1bn to the national GDP
through the export of halal products, foreign investment growth and import substitution. To
provide security guarantees for Muslim consumers and build halal awareness among
business actors, the Indonesian government collaborates with religious institutions, such as
the Indonesian Ulema Council (MUI), to formulate the halal certification policy (Efendi, 2020; Halal
Faridah, 2019; Noordin et al., 2014). The halal certification is a label issued on the packaging certification
of certain products to indicate that the ingredients and manufacturing processes do not
contain elements of haram or are forbidden by religion, helping the public to choose halal
policy
products.
Provisions regarding halal products are specifically explained in Law No. 33 of 2014
concerning Halal Product Assurance. This law regulates in detail general provisions, halal
product organizing bodies, materials and processes for halal products, provisions regarding
halal business actors, procedures for obtaining halal certificates, international cooperation,
supervision, community participation, criminal provisions, transitional provisions and
closing. Law No. 33 of 2014 concerning Halal Product Assurance also emphasizes the
existence of the Halal Product Assurance Organizing Agency (BPJPH) which is responsible
for administering halal product guarantees replacing the Indonesian Ulema Council (MUI).
In other words, the Halal Product Assurance Organizing Agency becomes the authorized
agency for the issuance of halal certification.
The implementation of the halal certification policy presents various challenges,
particularly in terms of small and medium enterprises’ (SMEs) acceptance of the policy.
Several studies related to halal certification implementation reveal that SMEs generally find
it difficult to comply with halal certification policies, due to reasons such as high costs,
inadequate socialization and knowledge about halal, and other factors (Puspaningtyas, 2021;
Qadariyah et al., 2021; Susanti, 2021; Wafaretta et al., 2020). Complaints have been raised
about the halal certification process, including the lengthy inspection and control
procedures, unpredictable costs for specific business cases, the validation of product raw
materials throughout the supply chain and the significance of halal certification in
improving product sales and increasing halal awareness among entrepreneurs and the
community (Ambali and Bakar, 2014; Putri et al., 2021). In addition, criticisms have been
made regarding the verification process, which does not guarantee that a product meets
strict halal criteria from upstream to downstream (Akim et al., 2019; Wirdyaningsih et al.,
2020).
The halal certification policy has generated various responses from business actors,
particularly at the SME level, with theological considerations and ethical awareness being
key factors. Some scholars argue that this policy is more related to the commercialization of
religion for economic and profit interests than to ideological–religious interests (Kaur and
Mutty, 2016; Mohamed et al., 2013; Purnama and Safira, 2017). As such, the implementation
of the halal certification policy must take into account the acceptance of these SME actors.
Policy acceptance is theoretically related to public support (Vlassenroot et al., 2008), which
entails voluntary acceptance, commitment, legitimacy and participation from the
community. However, there is a fundamental difference between acceptance and support,
where a policy may be accepted and followed by the community but that does not
necessarily imply that the policy will receive support from the community (Vlassenroot
et al., 2008). From another perspective, the acceptance of this policy can be framed in two
specific zones, namely, acceptance and rejection, both of which are related to the actions of
support and resistance from policy users (PytlikZillig et al., 2018). Therefore, while SMEs
may accept and comply with the halal certification policy, this does not necessarily mean
that they support it. An effective policy requires not only acceptance but also support from
the community.
The results of a preliminary study conducted on 20 SMEs in Bandung revealed that
pragmatic considerations are prioritized over normative theological reasons in complying
with the halal certification obligations. Business actors tend to see halal certification as a
JIABR means to fulfill their obligations as citizens, comply with regulations, formalize their
business units and tap into the potential of the sharia market in Indonesia. However, it is
essential to note that these findings may not necessarily represent the acceptance of SME
actors in general. Nonetheless, these preliminary results can provide an initial insight into
the acceptance and considerations of SMEs toward the implementation of the halal
certification policy.
The primary aim of this study is to provide a comprehensive understanding of the views
of SME actors toward halal certification policies. It seeks to achieve this by pursuing three
objectives. First, it aims to examine the perspectives of SME actors on halal certification
policies. Second, it seeks to analyze the characteristics of SMEs and their responses toward
halal certification policies. Lastly, it aims to understand the primary considerations of
business actors in implementing halal certification policies based on the dimensions of policy
acceptance as proposed by Vlassenroot et al. (2008). The results of this study are crucial in
strengthening the government’s efforts to build a robust halal system and create awareness
in the community. A deeper understanding of the acceptance of SMEs toward halal
certification policies can provide valuable insights into getting the support of policy users.

2. Literature reviews
Acceptance theory becomes an essential discussion in various fields, both in individual and
social contexts, which is often used to explain the phenomenon of acceptance, in which
people will act or react if specific actions are applied (Vlassenroot et al., 2008). Several
acceptance theories include the theory of planned behavior (Ajzen, 1991), the environmental
model (Steg et al., 2005), the technology acceptance model (Venkatesh et al., 2003) and the
theory of diffusion innovation (Rogers, 2003). In the context of particular policies or rules,
such as halal certification policies, the effectiveness of these measures will increase if there is
support from users (subject to the policy) (PytlikZillig et al., 2018; Vlassenroot et al., 2008).
According to Nelissen and Bartels (1998), acceptance must be seen from the growing
awareness that policymaking must be regarded as a two-way direction, where interaction,
transaction and communication with the public are the key elements. Acceptance is
influenced by many factors, such as policy preferences in the policymaking process
(PytlikZillig et al., 2018). Public support can be described as a positive assessment of
government policy implementation, which leads to an increased willingness to accept
actively, commit, participate, legitimize and support (Vlassenroot et al., 2008).
There are several methods of measuring the acceptance of a policy. This study uses the
acceptance model developed by Vlassenroot et al. (2008), which consists of two main indication
components, which include the following: first, general indications (related to the context of
awareness about the system), which include background and individual factors, style and
choices, information and knowledge about, personal and social aims, responsibility awareness,
social norms and problems perception; and second, an indication of the specific system (which
is directly related to the characteristics of the device) which includes perceived efficiency,
perceived effectivity, usability, usefulness, satisfaction, equity and affordability (Vlassenroot
et al., 2008). The policy acceptance model formulated by Vlassenroot et al. (2008) was
subsequently adapted to fit the context of halal certification policy examined in this study.
The policy acceptance model formulated by Vlassenroot et al. (2008) is based on and
developed from the policy acceptance model of Goldenbeld (2002), Ausserer and Risser
(2005) and Molin and Brookhuis (2007). This model has also been used by Lutfiana and
Ernawaty (2019) in measuring acceptance of Surabaya City Regional Regulation Number 2
of 2019. Policy acceptance model from Vlassenroot et al. (2008) was chosen as a reference for
halal policy acceptance because this model integrates several measures of policy acceptance
from previous models. Thus, several important measures of acceptability for various policy Halal
contexts are included in this model. certification
Acceptance is a condition that is often confronted with rejection. In government policies
such as halal certification policies, acceptance can be passive (low support option) or active
policy
(high support option). The same illustration applies to the disapproval of policies. Passive
acceptance indicates the absence of resistance or rejection of the policy, while active
acceptance indicates real support for the policy (PytlikZillig et al., 2018). Ausserer and Risser
(2005) provide another perspective by explaining that acceptance is a phenomenon that
reflects the extent to which a person is willing to use a particular system. Acceptance will
depend on how the needs of users (community) are integrated with the development of the
system. Therefore, acceptance is a system that can meet the needs and demands of various
stakeholders (Vlassenroot et al., 2008).
The concept of halal has been widely accepted by Muslim and non-Muslim communities.
The concept of halal is discussed as the standard of choice for these two groups worldwide
(Golnaz et al., 2010). The results of the study by Golnaz et al. (2010) support the premise that
non-Muslims are concerned with food safety, which positively influences their likely attitude
toward halal products, and find that attitudes toward halal food and perceived control are
significant predictors of intention. Consumer demand for halal product guarantees has
increased significantly in many countries. Hence, demands for the establishment of several
certification bodies for the legalization of halal products are mandatory in several countries.
Halal certification refers to the official recognition of the processes of preparation, slaughter,
cleaning, handling and other related management practices regulated by an established
legal entity (Aziz and Chok, 2013). The primary purpose of halal certification is to ensure
that the halal requirements of goods comply with Islamic hygiene principles and humane
treatment of animals, and other rules in the production process (Abdul et al., 2009).
The certification process is regulated in Law No. 33 of 2014 concerning Halal Product
Assurance, which states that various products circulating and selling to the public must be
guaranteed halal through halal certification. Technically, halal certification in Indonesia is
carried out by BPJPH (Halal Product Assurance Organizing Agency) under the auspices of
the Ministry of Religion of the Republic of Indonesia. BPJPH cooperates with MUI and LPH
(Halal Inspection Agency) to establish halal guarantees for a product for consumption by the
public (Faridah, 2019). Halal certification produces a halal label, an indicator showing that a
product meets the criteria for halal assurance obtained through halal certification. The halal
label is mandatory for business owners who have followed halal certification. The halal
label shows that the product meets various halal requirements and standards through a
halal certification process (Guntalee and Unahannda, 2005; Akim et al., 2019; Efendi, 2020;
Septiani and Ridlwan, 2020).
Previous studies have mostly focused on the impact of halal certification on businesses,
including profitability, consumer interest and effectiveness. In contrast, this study aims to
add to the existing literature by exploring the acceptance of halal certification policies
among small and medium-sized business actors, taking into account both logical and
theological considerations. The findings of this study are expected to inform the
government’s assessment of the effectiveness of the halal certification policy and to provide
insights for future policy development.

3. Research methodology
This study used a mixed method. The research procedures in this study are as follows:
 reading and describing the phenomenon of halal certification and the acceptance of
halal certification policies among SME actors;
JIABR  determining the design and methodology used in the study;
 literature study, distribution of questionnaires and interviews;
 data processing and study findings;
 analysis and interpretation of study findings; and
 preparation of study results.

3.1 Sample and data collection


This study’s data sources comprised survey results (quantitative) and interviews
(qualitative). The survey was conducted by distributing questionnaires to SMEs in
Bandung. Based on data from the Department of Cooperatives and Small Businesses, the
city of Bandung (2022), the number of SMEs in Bandung is 343,938. This study uses a
random sampling technique. This study used the number of indicators multiplied by ten
(Hair et al., 2014) to determine the sample size and obtained a minimum of 140 respondents.
A total of 400 respondents participated in filling out the study questionnaire.
Meanwhile, interviews were conducted with five SME actors who had followed the halal
certification policy in the city of Bandung. The following criteria determined the
interviewees:
 SME actors with businesses running for more than ten years;
 has been registered and participated in the halal certification program for the past
two years;
 has diversification and three business branches with the scope of the city of
Bandung; and
 understand the procedures and benefits of the halal certification policy for their
business.

The research was conducted for three months, from March to the end of May 2022.

3.2 Measurement
In this study, the author investigates the acceptance of the halal certification policy among
SMEs in the city of Bandung. The policy acceptance is measured using the policy
acceptance model developed by Vlassenroot et al. (2008). In the original model, the general
indications dimension consists of several indicators that include background or individual
factors, styles and choices, information and knowledge about, personal and social aims,
responsibility awareness, social norms and problems perception. Meanwhile, the system
indications dimension consists of several indicators that include perceived efficiency,
perceived effectiveness, usability, usefulness, satisfaction, equity and affordability.
To develop the indicators of the Vlassenroot et al. (2008) model, the author conducted a
comprehensive literature review and consulted with experts in the field. The author then
identified and operationalized the most relevant indicators of variables to the study context.
The author adjusted by modifying some indicators from the first dimension or general
indications to individual background, religious behavior, halal knowledge and information,
personal and social aims, halal awareness, social norms and halal perception related to halal
certification, and the perceived importance of halal certification for SMEs. Meanwhile, the
indicators in the second dimension or system indications were retained as they were
considered suitable for the study’s needs and context.
The developed indicators were then used to create a survey instrument to collect data Halal
from SMEs in Bandung. The survey questions were designed to capture the various certification
dimensions and indicators of the Vlassenroot et al. (2008) model and were reviewed by
experts and pretested before being administered to the sample population.
policy

3.3 Data analysis


This study uses descriptive analysis and confirmatory factor analysis (CFA) for verification
purposes. The descriptive analysis aims to elucidate the characteristics of the research
respondents. On the other hand, CFA is used to gain a comprehensive understanding of the
dimensional construct of policy acceptance, which is the primary consideration for SMEs in
relation to halal certification policies, as based on Vlassenroot et al.’s (2008) policy
acceptance model.
This study conducted a pilot test to analyze the validity and reliability of the
questionnaire instrument. The statistical results for the validity test with the product
moment show that the value of rcount > rtable, so all items in this study are valid. Likewise,
the results of the reliability test with Cronbach’s alpha showed that all items were reliable,
>0.60.

4. Results
4.1 Profile of respondents
The profile of the respondents in this study is presented in Table 1. To determine their
perspectives on the acceptance of halal certification policies, respondents were asked to rate
their level of agreement or disagreement on a scale of 1 to 5, with 1 indicating strong
disagreement and 5 indicating strong agreement. The scale included the following intervals:
strongly agree, agree, neither agree nor disagree, disagree and strongly disagree.

Characteristics Total %

Gender
Male 267 66.7
Female 133 33.3
Religion
Islam 312 78
Non-Islamic 88 22
Age
20–30 years 45 11.3
31–40 years 127 31.7
41–50 years 154 38.5
>50 years 74 18.5
Education background
High school and equivalent 111 27.7
Bachelor 289 72.3
Business fields
Culinary 314 78.5
Cosmetics 47 11.8
Medical drugs 39 9.7 Table 1.
Characteristics of
Source: Table by the author respondents
JIABR Table 1 above shows that the majority of respondents are males with an age range of
31–50 years. In addition, the educational background of the majority of respondents is
undergraduate, which means they are considered to have a good understanding of the
issues raised in this study. The business field of the majority of respondents is culinary,
where this business sector is closely related to halal procedures handling it.
Meanwhile, the qualitative study interviewed five informants based on their willingness.
Table 2 below shows the informant profiles of the five SMEs in this study. The gender of the
four informants is male, and only ES is female. The age range of the informants is 40–50 years,
and all of them are Muslim. Three informants have an undergraduate education background,
one high school and one master’s degree. In addition, most of the informants had a culinary
business, and only GPP had groceries business, although according to his information, most of
his products were food.

4.2 Quantitative result


The author conducted a verification analysis using the CFA method to determine the
dimensional construct of halal certification policy acceptance based on the model developed
by Vlassenroot et al. (2008). In addition to testing the dimensional construct, the author also
examined the feasibility of the research model. The results of the CFA test are presented in
Figure 1 below.
Table 3 above shows that the critical ratio (CR) and p-values for each indicator for the
general indications dimension have met the set critical values, namely, CR > 2.56 and p-
value <0.05. The exact value can also be seen in each indicator for the system indications
dimension, which has met the set critical values, namely, CR > 2.56 and p-value <0.05. The
test results also show that the estimated value for each indicator of the two dimensions of
acceptance of the halal certification policy is substantial or >0.5. All existing indicators
contribute significantly to the dimensions of the variables studied. These results indicate
that the instrument or measuring instrument used to measure acceptance of the halal
certification policy is valid and reliable. The standard loading values or the magnitude of the
influence of each indicator can be seen in Table 4 below.
Table 4 above shows that the estimated value for each indicator has a significant effect
(>0.5). The estimated value shows the total effect of each aspect on the forming indicators.
The indicator with the most significant influence on the general indications dimension is
halal awareness (0.994), which shows that research respondents consider halal awareness
essential in accepting halal certification policies, while the indicator with the correlation
coefficient and the most significant influence for the system indications dimension is
perceived effectiveness (0.994). This indicator shows that research respondents consider that
business actors can accept the halal certification policy set by the government because they

Informant (initial name) Gender Age (years) Religion Education background Business field

BS Male 47 Moslem Bachelor degree Culinary


GPP Male 42 Moslem Bachelor degree Groceries
ES Female 50 Moslem Senior High Schools Culinary
JH Male 40 Moslem Master degree Culinary
Table 2. AC Male 41 Moslem Bachelor degree Culinary
Characteristics of
interview informants Source: Table by the author
Halal
certification
policy

Figure 1.
Second-order CFA of
halal certification
policy acceptance

believe that the halal certification policy is an effective policy for building a halal system in
the business world.
CFA also produces specific measures that determine the value of the good fit of the
research model. Table 5 shows a summary of the results of the model feasibility test.
Table 5 above shows that some of the feasibility criteria of the research model have been
met, which shows that this research model is a good fit with empirical data.

4.3 Qualitative result


The author also conducted interviews with sources from SMEs who met the criteria
previously set. The results of interviews with five informants from SMEs in the city of
Bandung regarding the halal certification policy provide five important insight points.
JIABR Estimate SE CR Label

General_Indications <— Policy_Acceptance 2.306 0.188 12.254 par_13


System_Indications <— Policy_Acceptance 2.180 0.172 12.655 par_14
Religious behavior <— General_Indications 1.000
Individual background <— General_Indications 1.065 0.033 32.216 par_1
Halal knowledge and information <— General_Indications 0.881 0.035 25.446 par_2
Personal and social aims <— General_Indications 0.982 0.030 32.326 par_3
Halal awareness <— General_Indications 0.951 0.025 38.386 par_4
Social norms <— General_Indications 0.966 0.026 37.364 par_5
Halal perception <— General_Indications 0.967 0.027 35.592 par_6
Perceived effectivity <— System_Indications 1.000
Perceived efficiency <— System_Indications 0.958 0.020 47.418 par_7
Usability <— System_Indications 1.034 0.015 66.842 par_8
Usefulness <— System_Indications 1.072 0.019 57.785 par_9
Satisfaction <— System_Indications 1.084 0.020 53.830 par_10
Equity <— System_Indications 0.977 0.018 55.134 par_11
Affordability <— System_Indications 0.950 0.020 46.784 par_12
Table 3.
Regression weight Source: Table by the author

Estimate

General_Indications <— Policy_Acceptance 0.917


System_Indications <— Policy_Acceptance 0.909
Religious behavior <— General_Indications 0.967
Individual background <— General_Indications 0.978
Halal knowledge and information <— General_Indications 0.947
Personal and social aims <— General_Indications 0.978
Halal awareness <— General_Indications 0.994
Social norms <— General_Indications 0.992
Halal perception <— General_Indications 0.988
Perceived effectivity <— System_Indications 0.994
Perceived efficiency <— System_Indications 0.980
Usability <— System_Indications 0.993
Usefulness <— System_Indications 0.989
Satisfaction <— System_Indications 0.986
Equity <— System_Indications 0.987
Table 4. Affordability <— System_Indications 0.980
Standardized
regression weight Source: Table by the author

First, the informants’ perception of the halal certification policy is generally positive, as they
believe it provides assurance to both business actors and consumers that the products
they handle or consume are halal. This is in line with their religious beliefs, as the halal
certification is seen as a way to apply religious teachings in daily life. Therefore, the
informants view the policy as a means of support for business processes and public
consumption. This certification policy must at least be appreciated for religious purposes.
One of the informants stated:
Maybe because I believe in religious teachings, I appreciate the government’s efforts in
formulating the halal certification policy. For me, this is a positive policy to increase awareness,
enforce religious teachings in public life, and make people feel comfortable when they buy the Halal
products I sell. (BS, March 3, 2022)
certification
However, Informant 2 postponed his judgment regarding this policy by stating that: policy
I think this halal certification policy must first look at its future effects, then conclude whether
this policy needs to be implemented by business actors or needs to be corrected. However, not all
business actors and consumers are Muslims who understand halal teachings. So, at this time, I
cannot answer whether this is a positive policy or vice versa. (GPP, March 20, 2022)
Second, according to Informants 1–5, the requirements and processes necessary to obtain a
halal certificate are reasonable, although they acknowledge that these requirements may not
be applicable to all business actors. However, because the halal certification is based on
religious (Islamic) teachings and distinguishes between halal and nonhalal (haram)
products, the process must be carried out with care, which involves the active participation
of business actors, their management and the halal auditors. As one informant noted:
It seems important for the government to make certain considerations related to the category of
the business sector in the certification process. At least there is justice for business actors who
operationally cannot focus on fulfilling obligations, or business actors who are non-Islamic. (ES,
March 21, 2022)
According to the interviewees, some of the requirements for halal certification focus on the
active role of business actors. These requirements include having a halal management team,
providing halal training and education to all employees, ensuring that raw materials and
end products do not contain haram elements or nonhalal products and conducting routine
internal audits. However, interviewees acknowledged that these obligations are challenging
to carry out, as most business actors are more focused on surviving and competing in the
market, rather than thinking about halal certification. Limited capital and uncertain
business situations are also major concerns. As one informant stated:
The problem may be more in that most business actors have not had the time to register their
business and follow halal certification because they are still focused on surviving in a difficult
situation like when we have just passed the Pandemic. The level of business competition is very
high, which requires business actors to be good at managing their capital. While halal
certification, as far as I understand, requires careful planning, good management readiness, and
understanding of halal-haram in Islam, all of which require additional costs. (JH, March 24, 2022)
Another informant (AC) emphasized that the halal certification policy is only feasible for
business actors who have a well-thought-out plan and can recognize the added value of
obtaining halal certification. This does not mean that other business actors are not

Criteria Cut-off value Test results Conclusion

Probability >0.05 0.226 Fit


Adjusted GFI (AGFI) >0.90 0.910 Fit
Goodness of Fit Index (GFI) >0.90 0.924 Fit
Comparative Fit Index (CFI) >0.90 0.995 Fit
Tucker–Lewis Index (TLI) >0.95 0.994 Fit
Normed Fit Index (NFI) >0.90 0.955 Fit
Table 5.
Root mean square error of approximation (RMSEA) <0.80 0.031 Fit Summary of research
model feasibility test
Source: Table by the author results
JIABR conscientious in producing and running their businesses, as consuming and providing halal
products is a religious obligation that must be fulfilled regardless of any government
policies.
Third, Informants 1–5 view halal certification as a rational policy process. However, due
to the many requirements that must be met and the often bureaucratic nature of formal
policies, many business actors choose to delay the implementation of halal certification.
These business actors acknowledge that the costs involved in the entire halal certification
process are reasonable, although they may vary depending on the type, scope and
complexity of verifying the products being certified. As one informant stated:
Yes, as far as I have been involved, the fee set by the government for this halal certification is
quite reasonable. Nevertheless, this can be quite a burden for some people, especially for halal
business maintenance. However, returning to the previous issue, not many business actors are
ready with certain rules or policies because they have to think about the continuity of their
business. So, back to the readiness of the business actors themselves. (JH, March 24, 2022)
Fourth, Informants 2–5 thought that halal certification had not contributed or had a
significant impact on the existence or development of the business itself. Halal certification
also does not significantly impact the increase in the number of consumers who come or the
products sold. However, business actors realize that these things depend not only on halal
guarantees that business actors can provide but also on the community’s economic
conditions, which affect purchasing power, promotion processes and other factors that are
often unrelated directly to the halal label. One informant stated:
So far, there is no special effect related to the increase in profit after taking the halal certification.
Because business profits, I think it has more to do with many economic factors and not just
because of the existence of a halal label on the products we sell. However, following this halal
certification policy is more about inner satisfaction because I have tried to carry out religious
teachings and show obedience as a citizen. (AC, March 27, 2022)
The informant’s statement shows that halal certification is more recognized as the
implementation of obligations that the government has regulated and business actors’
awareness regarding the application of religious teachings in a business context.
Meanwhile, one informant thinks differently, stating that the halal certification policy
positively contributes to the business being run. In his expression:
I feel that there are certain blessings and benefits financially in the business that I run by
following the halal certification policy. Although this cannot be generalized because it depends on
each individual’s intentions, this halal certification at least makes me more organized in
managing my business, monitoring the supply of production materials, prioritizing the good of
consumers, and carrying out my obligations to workers. (BS, March 17, 2022)
Fifth, Informants 1–5 stated that halal certification could provide assurance and peace of mind
for the business actors and consumers. In the context of the culinary business, when consumers
find a halal label for the business, they will not hesitate to choose various types of food or drinks
available without having to question the halal status of the menus. One informant stated:
If you have to buy food in a place with a halal label and a place that does not have a halal label, of
course, you will choose a place with a halal label. Simple facts like that are an essential part of the
benefits that businesses must consider. After all, if business actors prioritize their consumers,
then ensuring that the products they consume are halal is a must too. (ES, March 21, 2022).
In several cases, the informants also said that particular consumers tried to ensure the halal
status of the food served, especially on foreign menus or consumers with strong religious
characteristics. A halal certificate or halal label allows business actors to convince Halal
consumers not to hesitate to buy the product. certification
Sixth, Informants 1–5 view halal certification as a favorable policy and has specific
benefits and good values as believed in religious teachings. However, informants emphasize
policy
the need to simplify the certification process so that business actors can carry out these
obligations properly. Business actors also realize that a halal label on a business or product
will provide added value in the future. In the personal religious context, informants also
believe that halal certification can provide specific blessings for the business. In the words of
one informant:
I think halal certification is not a matter of whether this halal label can bring profit, but because
halal is indeed an important part of religious teachings that must be upheld. Moreover, providing
certainty and comfort to the people who buy our products, is an act of kindness which I’m sure
will also bring good to the business. (AC, March 27, 2022)
Based on the results of the interviews, the halal certification policy required by the
government gives business actors more awareness of halal for the business they run or the
products sold to the public. These responses are considered the most significant
consideration for the acceptance of business actors regarding the halal certification policy.

5. Discussions
The implementation of the halal certification policy by the government is a significant step
toward ensuring halal compliance in the market and meeting the increasing demand for halal
products among Muslim consumers. This policy is a continuation of the halal certification
program previously carried out by MUI through LPPOM, which was initially voluntary and
relied on the awareness of business actors to obtain halal certification for their products (Faridah,
2019). The demand for halal certification, however, has grown significantly, and halal
certification is now considered a necessary requirement for businesses to gain access to the
global halal market. As a result, the government has implemented a mandatory halal certification
policy to ensure halal compliance and support the development of a comprehensive halal
ecosystem in Indonesia. The halal certification policy also aims to provide assurance to
consumers that the products they consume are produced in compliance with Islamic principles
and do not contain any prohibited substances.
The demand for halal guarantees for various products in Indonesia is becoming
increasingly widespread, and the predominantly Muslim population represents a significant
potential share of the halal market. In response to these conditions, the government formulated
a binding policy in Law No. 33 of 2014 concerning Halal Products Assurances. This policy aims
to ensure that business actors can provide their consumers with certainty regarding the
halalness of their products, from both the material aspect and the production process. Business
actors who use halal labels without proper certification processes can receive strict sanctions.
Halal certification in Indonesia is now mandatory, but business actors must be aware of the
registration process. The level of acceptance of this policy can depend on how well-informed
the public is about the issue and the new tools introduced to solve the problem (Schade and
Schlag, 2003; Steg and Vlek, 1995). Some business actors view the policy as a new technical
burden for starting businesses, while others believe that halal certification is essential to assure
the public that their products are suitable for consumption.
The findings of this study reveal that the halal certification policy is broadly embraced
by business actors. Nevertheless, there are specific concerns related to their understanding
of halal knowledge and information, perceptions of halal, levels of halal awareness, the
perceived efficiency and effectiveness of the certification process, its utility, satisfaction
JIABR levels and affordability for business actors in implementing halal certification policies.
These results underscore the need for refining the rules and their application within the
halal certification policy to ensure that it is better understood and received by business
actors. This can be achieved through government-led initiatives aimed at enhancing
awareness of the halal system among both the general public and businesses.
Numerous factors come into play when considering the implementation of the halal
certification policy, as highlighted by the outcomes of the previous CFA analysis (Table 3).
These factors encompass key aspects such as halal awareness, perceived effectiveness and
usability indicators. However, there are additional factors that require bolstering, including
the halal knowledge and information indicator, religious behavior indicator, personal and
social aims indicator, as well as the individual background indicator pertaining to each
business actor’s approach to implementing halal certification.
These findings are further corroborated by insights obtained from interviews with research
informants. These interviews reveal that, in general, business actors have not prioritized
expanding their knowledge about halal. Instead, their implementation of the halal policy is
primarily motivated by their desire to fulfill religious obligations, with the hope of receiving
blessings for their business endeavors. Consequently, there is a need for the government to
enhance its efforts aimed at raising awareness about the halal system within the community
and among businesses. This can be achieved through a refinement of the rules and their
application, making them more accessible and comprehensible for business actors.
The findings of this study are consistent with numerous prior research endeavors that
have underscored the multifaceted nature of accepting a halal certification policy. Such
acceptance not only contributes to heightened halal awareness but also plays a vital role in
cultivating a pervasive halal system within society and the business landscape (Abdul et al.,
2009; Aziz and Chok, 2013; Ambali and Bakar, 2014; Efendi, 2020). The study elucidates that
the acceptance of halal certification policies is predominantly driven by the need to fulfill
business obligations and capitalize on the burgeoning market demand for sharia-compliant
products and services. However, it is imperative to note that this acceptance does not
consistently correspond with a deep comprehension of halal as a holistic way of life
encompassing purity, health, virtue and Islamic values. According to Vlassenroot et al.
(2008), a sense of responsibility is closely linked to individual and social objectives and the
perception of challenges at the individual level.
This study brings to the fore the diversity in responses to the halal certification policy,
underscoring the necessity to reinforce specific indicators that may be lacking compared to others.
These indicators include the halal knowledge and information indicator, religious behavior
indicator, individual background indicator, and personal and social aims indicator. Even though
halal awareness and perceived effectiveness are considered the two most pivotal factors (indicated
by the highest loading factors) in the acceptance of the government’s halal certification policy,
business actors still need to fully embrace these indicators. The concept of halal, in its entirety, is
yet to be comprehended as the embodiment of religious teachings governing a virtuous life, the
avoidance of prohibited substances that may harm individuals, ethical living and the
incorporation of religious values and wisdom. Halal has not been universally regarded as a way of
life transcending the legal confines of sharia. The halal certification policy is yet to be perceived as
a framework that can accommodate this virtuous way of life within the realm of business.
Although the majority of business actors involved in this study, including those
who served as interview informants, are Muslims, the results indicate that theological
considerations do not stand as the primary factor guiding their acceptance of the halal
certification policy. The analysis and interviews conducted unveil that the acceptance of the
policy is influenced by a plethora of secular factors, including utility, usability, equity, Halal
affordability, perceived effectiveness and perceived efficiency. certification
policy
6. Conclusions
Based on the findings of this study, the author can draw the following key conclusions:
First, the survey and interviews conducted as part of this research indicate that the halal
certification policy enjoys general acceptance among business actors. It is widely viewed as
favorable and necessary for fostering halal awareness and creating a robust halal ecosystem
within the business environment. However, it is important to note that there are certain
criticisms related to knowledge and information about halal certification, including concerns
about its efficiency, effectiveness, usefulness, fairness, satisfaction levels and affordability.
Second, through CFA, the author identified specific indicators that strongly influence the
acceptance of the halal certification policy. Among these, halal awareness and perceived
effectiveness received the highest scores, indicating their significant impact. On the other
hand, indicators such as halal knowledge and information, religious behavior, individual
background and personal and social aims received lower scores. It is noteworthy that all
acceptance indicators for the halal certification policy meet the criteria of a well-fitting
model. Third, the interview results reveal that the acceptance of the halal certification policy
is not solely rooted in theological or religious considerations. It also encompasses pragmatic
aspects related to the business activities being conducted.
This study highlights the widespread acceptance of the halal certification policy within
the business community. This acceptance is driven by factors like high halal awareness and
perceived effectiveness. However, there are areas of improvement, particularly in enhancing
knowledge and information about halal certification, addressing religious behavior,
individual backgrounds and personal and social aims. In addition, the study emphasizes
that the acceptance of the policy is not solely religious; it also involves practical
considerations related to business operations.

6.1 Implications
The implications of this study are as follows: First, the implementation of the halal
certification policy must take into account the various indicators of policy acceptance,
particularly from the business actors who are responsible for implementing the policy.
Second, the implementation of the halal certification policy must also take into account the
heterogeneous characteristics of the business actors. Third, the certification policy should
focus on two critical indicators, namely, halal awareness and the perceived effectivity of
policy implementation, which can be reinforced by other indicators.
The results of this study confirm that the government must take into account the
response of business actors to ensure the effectiveness of implementing the halal
certification policy. The government can take an important step in this regard by
conducting a survey of business actors who have participated in the halal certification
program to understand the benefits and satisfaction they receive from the policy and
identify the factors that hinder them from accepting the halal certification policy.

6.2 Limitations and future research directions


This study has several limitations that should be considered. First, the topics and variables
studied are focused only on the dimensions of acceptance of the halal certification policy. It
would be more comprehensive if integrated with other variables in correlational and
implicative studies. Second, the measurement model used in this study is modified from the
policy acceptance model, which focuses on normative and systemic aspects of the policy
JIABR without considering theological values of the halal certification policy. A more complex
model is required to measure the acceptance of a comprehensive halal certification policy
that considers both normative and theological aspects.

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Further reading
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About the author


Wahyudin Darmalaksana is a lecturer and researcher at Sunan Gunung Djati State Islamic
University, Bandung. Several of his works have been published in various international and national
journals, as well as several national publishers. Wahyudin Darmalaksana can be contacted at:
[email protected]

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