Singapore: How This Startup Uses Blockchain to Simplify the HALAL Certification Process

Indonesia's emerging HALAL certification law means that 1.5 million enterprises are competing in the market for certification.

Indonesia will implement new HALAL certification rules for various consumer goods such as food, cosmetics and pharmaceuticals before the end of 2019.

Under this new rule, enterprises in this region with the world's largest Muslim population must go through a certification process and obtain a three-year HALAL certification. Failure to comply with this new rule will result in administrative penalties.

With the new rule, there are 1.5 million enterprises in the market scrambling to print the HALAL logo on their products, and this is exactly the opportunity that Singapore-based blockchain startup WhatsHalal hopes to seize.

In an interview with e27, the company's business development director Muhammad Hadi Bin Rahmad explained the two challenges that enterprises and the government face in implementing HALAL certification:

First, the lack of a unified platform to bring together all stakeholders in the entire supply chain (from farmers, manufacturers and traders to consumers).

Second, there are administrative obstacles. 'Every stakeholder in the supply chain has different processes and systems. It is also very manual and labor-driven,' the director said.

When it comes to Indonesia and its upcoming HALAL certification regulations, enterprises and the government are facing a new and unique challenge.

Currently there are 17,000 companies in the market with HALAL certification, and within the next five years, this number needs to be increased to between 1 million and 5 million.

WhatsHalal CEO Azman Ivan Tan elaborated on the process companies must go through to obtain HALAL certification, and how the WhatsHalal platform helps simplify this process.

WhatsHalal CEO Azman Ivan Tan

First, enterprises need to decide which certification to use (provided by which body). Then they need to ensure that all raw materials come from HALAL sources; they also need to understand the ruling and assurance systems.

'Usually, these companies hire a consultant. After a pass-or-fail audit process, they feel the need to go back and look at the changes they had to make (before obtaining certification),' he explained.

With WhatsHalal, companies can start using the platform by selecting the market they wish to operate in. The platform will show them whether they can go through the audit process themselves, or whether they need a consultant.

'If you find it too much trouble, the system will assign you a consultant. If you are satisfied with the consultant, you pay the fee and the consultant takes over. They will upload the raw materials, and the blockchain will help verify whether they are HALAL from the start,' Tan said.

The main problem the company aims to solve is the uncertainty about the degree to which a particular food is HALAL.

'In the past, we tended to take the attitude that everything is HALAL unless otherwise stated, but then I realized that (customers) are not clear about what is HALAL or not, because not everything produced now has full ingredient disclosure. You can't see where the source is,' Tan emphasized.

WhatsHalal business development director Muhammad Hadi Bin Rahmad

In addition to the HALAL certification process, WhatsHalal also offers other services, such as on-demand food delivery.

The startup acquired HalalOnClick in 2018, expanding this service.

In the future, the company also intends to launch a HALAL scanner for end customers, leveraging the large amount of data the startup obtains and their ability to trace the origin of products.

'The HALAL certification platform is just the first (technology we are working on). The second part of the technology is traceability—it sets us apart from other companies that talk about blockchain. We are working on devices such as IoTs and RFIDs... we will put them into every link of the supply chain,' Rahmad explained.

He added: 'The value of Japanese wagyu beef is so high because its certificate has detailed descriptions.'

WhatsHalal is currently managed by a team of 21 people in offices in Singapore, Kuala Lumpur and Jakarta.

In Indonesia, the company has established a partnership with Sucofindo, a joint venture between the Indonesian government and the Geneva-based inspection giant SGS.

Currently funded internally by the company, Tan hinted that some external parties have already expressed interest in investing in the company.