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sectors as well. Malaysia undeniably is recognized as among the global leas for Islamic banking and finance
due its growth and comprehensive regulation. This sector started in 1983 with the formation of the first
Islamic bank in Malaysia. From this significant beginning, the sector is expanded to the takaful and
Islamic capital market consist of several financial products such as equity, sukuk and funds. The progress
in the Islamic banking industry is shown by the evidence that it is a second country that has the largest
Islamic banking industry after Saudi Arabia in 2011 Malaysian ICM 2013. The 2012 data shows that
Malaysia’s sukuk outstanding size comprises 68 per cent of the total worldwide size, wherein the capital is
channeled to financing different sectors in the capital market. . In a broader perspective, the halal industry can
be categorized into several sectors, specifically banking and finance, food and beverages, pharmaceutical and
cosmetic products, logistic and tourism see Figure 1.
Figure 1. The selected sectors under the global halal industry
Source: Adapted from Halal Industry Development Corporation 2013
Currently in Malaysia, there is no specific authority body who are conducted or integrated halal industries
with Islamic finance. Specifically, it will assess the
current practices of the authority bodies on ‘halal certified’ or ‘shariah compliance’ through their main
documentation. There are three main bodies which are Jabatan Kemajuan Islam Malaysia JAKIM, Securities
Commision SC and Malaysia Department Standard. Therefore, to make sure that Malaysia applied same
rules of shariah compliance, industry needs one authority body that control all two sector sectors halal
industry and Islamic finance in the same umbrella of industry.
3. HALAL COMPLIANCE
In the Muslim majority, the concept of halal is the absolute key to consumption. The
word “Halal” literally means permissible and in translation, it is usually used
as lawful. Opposite to halal is haram, which means unlawful or forbidden. It is clearly stated in Al-Quran
and Sunnah guidance dictates that all foods are Halal except those that are specifically mentioned as Haram
unlawful or prohibited. By referring to halal industry, the term provides a very significant meaning of
producing goods and services that can fulfill the halal requirements. Malaysia aggressive promoting halal
industry, where one of the results of the effort is that the Malaysian Halal Certification, which is designed to
cater the halal goods sectors, have been named as the
world’s best example for halal food benchmarking by the United Nation in 1997 Bohari, Wei Hin Fuad,
2013. .
The government and all related authority body have been given full support to ensure the integrity of the
industry. Jabatan Kemajuan Islam Malaysia JAKIM is the main authority body in Malaysia which is
responsible for consumer goods with support from the Department of State Religious Affairs JAIN State
Islamic Religious Council MAIN. The main JAKIM’s responsible is issue Halal Certificate to applicant
premisescompanies that involved in the industry and conduct the enforcement. It is important in granting
halal status to applicants, since the halal certificate and logo reflected the halal assurance of product.
Furthermore, it is to ensure the applicants are complained with Shariah requirements. Before the
companies get the Halal certificate, and fulfill the requirement, JAKIM will issue Manual Persijilan Halal
to the company. The certificate works as assurance toward halal compliance Halal Industry Development
Corporation 2013. The Malaysia Department Standard SIRIM is also the
authority body where are national organization that responsible for standardization and quality, and does not
accountable directly on halal industry in Malaysia. SIRIM will issue standards that are read together with
JAKIM’s existing documents. Among those documents are MS 1500: 2009 Halal Food
– Production, Preparation, Handling and Storage
– General Guidelines and MS2200 Islamic Consumer Goods
– Part 1: Cosmetics and Personal care
– General Guidelines. Besides that, SIRIM also issue individual standard
related to organizations’ Islamic practices. The MS 1900: 2005 Quality Management System
– Requirement from Islamic Perspective is the standard bases on Islamic
principle and governed by SIRIM.
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However the status Halal can be revoked if the comp
anies do not fulfill JAKIM’s requirement. Under the governance of halal compliance, Trade Description
Act 2011 is precisely explained about the monitoring the falsification of signage and image of Islam in the
premises that do not being granted Halal Certificate from JAKIM.
4. ISLAMIC FINANCE
