The Halal Journal Apr-Jun 2011 by The Halal Journal

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39 :: April-June 2011

TowarDS a halal Economy

• UK £2.95 • AUstrAliA AU$6.50 • UAE Dhs10 • MAlAysiA RM9.90 • singAporE s$5.50 • issn 1823-1441 • pp 13884/10/2011 (028515)

The Power of Values in Global Markets

lIVInG h MUCH ADO ABOUT THE ENVIRONMENT AND THE ECONOMY OF TODAY h BOOK: THE RESTLESS WIND AND SHIFTING SANDS h GADGET: GSM MOBILE QURAN MQ3500 h MUSIC: MERCAN DEDE A.K.A. DJ ARKIN ALLEN – FUSING THE SOUNDS OF THE EAST & WEST h MOVIE: MOOZ-LUM – A FILM BY QASIM “Q” BASIR 69

HALAL AS AN ASSET CLASS Introducing the world’s first Halal Index! COMMODITY SPECULATION: BANKING ON THE HUNGRY POOR Are speculators behind the surging food prices? HALAL HURDLES What to expect in your race towards wholesome & holy brands GOING GREEN FROM AN ISLAMIC PERSPECTIVE What does it really mean?

Conversations

DaTo’ hj. wan mohamaD & uSTaZ ZaInal aBIDIn – jaKIm

raFE hanEEF – hSBc amanah

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contents | April-June 2011

DiSclaimer : While all care is taken, the publisher accepts no responsibility for the information contained herein which is believed to be reliable. The publisher/editor takes no responsibility for opinions expressed or implied as they are the writers’ own and do not necessarily reflect that of the publisher or editor who make no warranties governing material, including advertising or features contained within this publication. This publication may not in whole or part, be copied, reproduced or translated without prior written permission of the publisher.

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Features 32} COMMODITY SPECULATION: BANKING ON THE HUNGRY POOR Are speculators behind the surging food prices? 38} HALAL HURDLES What to expect in your race towards wholesome & holy brands 42} GOING GREEN FROM AN ISLAMIC PERSPECTIVE What does it really mean? 50} HALAL AS AN ASSET CLASS Introducing the world’s first Halal Index! 52} KNOWLEDGE MANAGEMENT Understand the importance of managing knowledge in your business 54} BUSINESS CONTRACTS & MICROFINANCE All you need to know about Mudharaba

Global Browsing

08} Global News + Happenings

P A G E

c ov e r s to ry

Stay Tuned

14} A brief insight into events currently shaping the Halal industry & consumer lifestyles around the globe

TOWARDS A HALAL ECONOMY

The power of values in global markets

Fast Track

62} Halal laboratory in the Philippines now in operation 64} Philippines: Consultations on Halal food standards underway 65} Pakistan’s bill of Halal certification

Civilisations

66} KAZAKHSTAN PROVIDES FOOD & SECURITY

Living

Conversations 36} DATO’ HJ. WAN MOHAMAD & USTAZ ZAINAL ABIDIN JAFFAR OF DEPARTMENT OF ISLAMIC DEVELOPMENT MALAYSIA (JAKIM) JAKIM’s views on Halal pharmaceuticals 46} RAFE HANEEF OF HSBC AMANAH Moving from Halal to Tayyib – trends for both food & finance 60} TONY WO KAH KEAT OF DINDINGS POULTRY PROCESSING SDN BHD Balancing quality & profitability

69} MUCH ADO ABOUT THE ENVIRONMENT & THE ECONOMY OF TODAY An interview with the man behind “Green Deen: What Islam Teaches about Protecting the Planet” 74} A FASHION SHOW WITH HEART

Parting Words

80} MARKETING ISLAMIC ARTS IN THE CONTEMPORARY WORLD

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Ed’s Note

Do drop us your comments at info@halaljournal.com

Embracing universal values...

page

H a A C

a l a l s a n s s e t l a s s

Today, end of 2010, there are close to 580 Islamic funds with about USD36 billion in assets under management (Lipper), but has Islamic investing captured the imagination of the (Muslim) man on the street? Or is Islamic investing only about bankable Muslim customers?

The 6th World Halal Forum, themed ‘Towards a Halal Economy – the Power of Values in Global Markets”, is our cover story, which is insightful and will, inevitably, help enhance your business by providing you an overview of Halal 2.0 – the next gear change for Halal and Islamic finance. Prepare yourself for the Halal economy and learn this new ‘language’ from p26. “Halal as an Asset Class” (p50) is one of our related cover story features. Rushdi Siddiqui, Global Head of Islamic Finance and OIC Countries at Thomson Reuters, also a speaker at the 6th WHF, explained the real convergence of Halal and Islamic finance, and along the way introduce the world’s first Halal Index! What do you think of the statement: “Commodity derivatives are the main culprit behind surging food prices”? Our industry insider, Abdullah Ibn Musa, deliberated on this topic in “Commodity Speculation: Banking on the Hungry Poor” (p32). Branding your Halal products and services? Then this article by Jonathan A.J. (Bilal) Wilson, a Senior Lecturer and Course Leader in Advertising and Marketing at the University of Greenwich, London, UK, is a must-read. He clearly outlined existing Halal hurdles (you may not even be aware of) to prepare for your race towards wholesome and holy brands (p38). If you are concerned about the environment, “Going Green from an Islamic Perspective” (p42) sheds new light on this topic. Marco Tieman, who has vast experience in food supply chain, answered questions like “how do we manage our resources?”, “how can we be a better steward (Khalifah) of this Earth?”, and ultimately, “what does going green really mean from an Islamic perspective?” We didn’t just stop there, we conversed with Ibrahim Abdul-Matin, author of the thought-provoking book, “Green Deen: What Islam teaches us about protecting the planet”. Read it from p69 onwards. Finally, don’t miss three interesting Conversations pieces from our interviews with the Department of Islamic Development Malaysia (JAKIM) on the world’s first Halal pharmaceutical standard (p36); the General Manager of Dindings Poultry Processing Sdn Bhd who shared his company’s experience in high-quality Halal poultry products manufacturing (p60); and the Managing Director for HSBC Amanah Global Markets in the Asia Pacific region, who affirmed that moving from Halal to Tayyib is the trend for both food and finance (p46). We wish you a pleasant read and see you at World Halal Forum 2011!

the Heart of T he Halal Jour nal Halal refers to that which the Creator has made lawful. Its opposite Haram, refers to what is forbidden. The realm of Halal extends beyond the obvious references to food and touches on all matters relating to human life. In the commercial arena, all goods and services, market transactions, currencies and other activities come under the judgments of Halal and Haram.These parameters include protecting the environment, humane treatment for animals, ethical investments, the intrinsic value of currencies, and fairness in all commercial transactions.The global Halal market is now a new economic sector, and we believe it will be one of the great market forces in the coming decades.

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Business

Lifestyle

Trends

EDITORIAL EDITOR Hajjah Jumaatun Azmi sEnIOR WRITER Ruzanna Muhammad ruzanna@halaljournal.com WRITER Zaahira Muhammad zaahira@halaljournal.com R E s E A RC H E R s Mohd Amri Sofi Dayana Nordin COnTRIbuTIng WRITERs Tun Musa Hitam Rushdi Siddiqui Azhar Nadeem Marco Tieman Fe Jazzareen Naazish YarKhan Abdullah Ibn Musa Hajj Abdalhamid Evans Jonathan A.J. (Bilal) Wilson C R E AT I v E D I R E C TO R Mark Piet sALEs & DIsTRIbuTIOn Nadia Yusof nadiayusof@kasehdia.com Fazah Zuhainie Nadri fazah@kasehdia.com CORPORATE FOunDER & MAnAgIng DIRECTOR Hajjah Jumaatun Azmi

everywhere you go, always bring the guidance with you

gEnERAL MAnAgER Radha Vengadasalam AssIsTAnT MAnAgER, EvEnTs & PROJECTs Huzaimah Hashim PUBLISHER

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PA RT n E R E v E n T s WHF • MIHAS • WHF Europe • World of Halal Euro Halal Market • Food & Hotel Malaysia MENA Insurance Summit

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KASEHDIA HALAL GUIDES SERIES guide for halal food + drinks + muslim travellers on-line purchase : www.kasehdia.com

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global browsing news + happenings Compiled by Zaahira Muhammad

CerTIFICaTIon malaYsia

GET HALAL CERTS, MUSLIM EATERY OPERATORS TOLD assistant Minister in the Chief Minister’s office (Islamic affairs), Datuk Daud abdul rahman, has appealed to Muslim eatery operators in the state to get halal certification. he said as 75 per cent of those who applied for halal certification were non-Muslims, more efforts are required to raise awareness amongst Muslims. “To be halal-certified, there are lots of regulations that one needs to follow. For instance, just because you are of Muslim faith doesn’t mean that your restaurant would automatically be certified halal. For the non-Muslims, not serving pork at your premises does not make it halal either. Being halalcertified involves meeting all the procedures such as the ingredients used, source of chicken meat, cleanliness of the premises, kitchen and even the utensils,” said Daud. |SOURCE: BORNEO POST ONLINE, 13 MARCH 2011

malaYsia

HALAL CERTIFICATION FOR 51 COMPANIES SUSPENDED The halal certifications for 51 companies were suspended last year for various violations of the Malaysian halal standards. Minister in the Prime Minister’s Department, Datuk Seri Jamil Khir Baharom, said of this number, six companies had their halal certifications withdrawn by the halal validation panel and forbidden from using the halal logo. however, he added, 23 companies had their halal certification reinstated after the panel was satisfied with the corrective measures undertaken as ordered, while the other 22 The halal Journal | April-June 2011 |

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meat processing plants in japan have begun catering to a growing interest in the middle east by providing halal-certified meat. Famous for their Kobe beef – the most expensive in the world for its rich flavour, tenderness and fatty marbling – the country’s meat producers have begun turning their attention to an underserved market looking to taste this japanese delicacy. Zenkai meat corp., for instance, announced in march at the country’s annual international food and beverage show, Foodex, that they’ll be launching domestic sales of halal beef. Zenkai’s new foray into the muslim market is in collaboration with partners in indonesia and malaysia – both predominantly muslim countries.

|SOURCE: THE INDEPENDENT (UK), 2 MARCH 2011

EAST MEETS MIDDLE EAST WITH JAPANESE HALAL BEEF

THE REAL KOBE : Kobe beef refers to cuts of beef from the black Tajima-ushi breed of Wagyu cattle, raised according to strict tradition in Hyōgo Prefecture, Japan. The meat is generally considered to be a delicacy, renowned for its flavour, tenderness, and well-marbled texture. The Wagyu cattle’s genetic predisposition yields a beef that contains a higher percentage of omega-3 and omega-6 fatty acids than typical beef. The increased marbling also improves the ratio of monounsaturated fats to saturated fats. THE LOWER CLASS KOBE :The massive increase in popularity of Kobe beef in the United States has led to the creation of “Kobe-style” beef, taken from domesticallyraised Wagyu crossbred with Angus cattle, in order to meet the demand. Kobe marbled meat

RAVEN RELEASES HALALCERTIFIED RUBBER BOOTS AND RUBBER APRONS FOR THE FOOD INDUSTRY

Raven Tactical Wear Ltd, a private company established to provide high quality footwear and clothing for specialist markets, has launched the world’s first range of Halal-certified food industry-compliant rubber boots and apron that is also completely ecologically-friendly! SOURCE: PRLOG.ORG, 12 MARCH 2011

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global browsing

global

JAKIM, IIUM COLLABORATE TO RESEARCH HALAL PRODUCTS The Department of Islamic Development Malaysia (JAKIM) would tap International Islamic University Malaysia (IIUM)’s expertise in various fields of research to identify Halal products that are free from non-Halal deoxyribonucleic acid (DNA) content. |SOURCE: BERNAMA, 15 MARCH 2011

were in the process of doing so. he mentioned that the action was the result of checks conducted on 1,384 premises and products by the Department of Islamic Development Malaysia (JaKIM) nationwide, comprising 1,077 food products, 267 eateries in hotels and individual restaurants, 39 abattoirs and two warehouses. They were monitored and inspected following complaints from consumers of misuse of the halal certificate and logo. To further strengthen the halal certification, JaKIM had recognised 52 halal certifying bodies in 26 foreign countries. |SOURCE: BERNAMA, 18 MARCH 2011

First of all, restaurant owners need not be Muslim for their eateries to be certified as Halal. Only two cooks or food supervisors are needed for a Halal eatery. And what is more, it costs only $30 for a restaurant to be certified as Halal.

ISlamIc BanKS nEED To ImProVE SErVIcES Islamic banks have so far left a good impression on their customers but their real test would begin once the Islamic operations of conventional banks close and customers move to them rather en masse, banking expert. So improving their services is one of the most formidable challenges these banks face. Islamic banks need to diversify their products and services and incorporate more transparency. SOURCE: REUTERS, 6 MARCH 2011

for their establishments. First of all, she cleared the misconception that the owners should be Muslim. They need not be. There were two types of halal certificates, one for restaurants and the other for factories. For the local restaurants, the main requirements were to provide two halal food supervisors or cooks who are Muslim workers. The Muslim workers most recommended are cooks or those handling food. They should report to our office and sit for a test which can be written or oral. There is an english version and a Malay version: If they can’t write, we help verbally. There is a guide book to study. For the first application, there would not be any charges. When a food establishment is approved by the religious Council that they are halal, the certificate will cost BnD30 both for the restaurant and for the factory. |SOURCE: BRUDIRECT, 12 MARCH 2011

uGanDa BrunEI DaruSSalam

OFFICIAL CLEARS THE AIR ON HALAL EATERIES an avalanche of applicants is expected after a senior halal officer clarified procedures to obtain a halal certificate for eateries. The move could ensure that all Brunei eateries are certified halal. First of all, restaurant owners need not be Muslim for their eateries to be certified as halal. only two cooks or food supervisors are needed for a halal eatery. Moreover, it costs only BnD30 for a restaurant to be certified as halal, and the procedure is fast, simple and straightforward. hajah rabiatul adawiyah haji ahmad, Food officer at the Ministry of religious affairs’ Shariah affairs Department, halal Food Control Division, said that the department would welcome everyone with sufficient requirements. There has been some uncertainty, particularly among restaurant operators, about the halal certification The halal Journal | April-June 2011 |

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UNBS SIGNS PARTNERSHIP FOR HALAL CERTIFICATION arrangements to have locally produced goods and hospitality facilities certified basing on scientific and religious values have been finalized. The move aims to help enterprises gain and expand market share. The uganda national Bureau of Standards and the uganda halal Bureau last week signed a partnership through which locally produced beverages and institutions will get certified under hygienic and religiously acceptable standards. under the initiative, all beverages and hospitality facilities with halal recognition and that of unBS, entrepreneurs will have export opportunities to the global halal market with about 1.6 billion halal consumers. Targeted for halal certification are food processors and food service institutions such as hotels and restaurants. Dr Terry Kahuma, the executive Director of the unBS, said the partnership seeks to ensure that meat products satisfy the doctrines of scientific as well as the religious standards. |SOURCE: DAILY MONITOR, 7 MARCH 2011

lIFeSTYle FrancE

FRANCE TO ENFORCE MUSLIM VEIL BAN FROM APRIL France will start enforcing a ban next month on full Islamic face veils, officials said, meaning any veiled woman can

be summoned to a police station and asked to remove her face-covering or pay a fine. officials say the law is mainly symbolic and police will not call in every veiled woman they see to avoid stigmatising Muslims. But a Paris imam said forcing veiled women to present themselves at a police station would be just as uncomfortable. When France passed the ban on full-face veils last year, Muslim leaders voiced concern it could lead to veiled women being unfairly treated by police or singled out for harassment. The ban forbids wearing any garment concealing the face in a public space, namely the street, public transport, shops, schools, courtrooms, hospitals and government buildings. From april 11, police are instructed to summon veil-wearers to a station, where they will be asked to remove the garment for “identification” and leave it off. If the wearer refuses to remove it they will be fined up to 150 euros (uSD208). |SOURCE: REUTERS, 4 MARCH 2011

STanDarDS malaYSIa

HALAL ON ITS OWN, IS NOT ENOUGH Food graded as halal should take into account far more than just how the animal is slaughtered, said Dato’ Seri Jamil Bidin, Ceo of the halal Industry Development Corporation in Malaysia. Dato Jamil said, “Consumer’s mindset has shifted from caring solely about the physical product attributes to spiritual, social, environmental and sustainability issues. You must be able to show your credentials to act in a green way, to be socially responsible and to see the bigger picture at every stage of the supply chain. The integrity of what halal means must be preserved in a wholly traceable way.” at the halal Industry Development Corporation, Bidin is proposing a uniform standard of halal food to be implemented all across the world. “We are making an effort to harmonise the standard of halal food so that it becomes more than just a logo or certificate and really means something. We want it to be on par with other industry standards in the world.” |SOURCE: HOTELIERMIDDLEEAST. COM, 3 MARCH 2011 www.halaljournal.com

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global The Halal Journal welcomes all queries, comments, suggestions and criticisms. write to us at info@halaljournal.com or fax your letters to +603 6203 4072.

global browsing

malaYSIa

NEW MALAYSIAN STANDARD ON HALAL PHARMACEUTICALS Malaysian Standard -- MS 2424:2020 (P): halal Pharmaceuticals: General Guidelines, the world’s first incorporated general guidelines for halal pharmaceuticals, are expected to benefit Malaysia in the competitive halal industry. Science, Technology and Innovation Deputy Minister, Datuk Fadillah Yusof, said that with the development of the Malaysian Standard series, including MS halal Pharmaceuticals, Malaysia has an advantage in the increasingly competitive halal market. The guidelines on the requirements and critical areas in the manufacturing and handling of halal pharmaceuticals were developed by the Industry Standards Committee on halal Standard (ISC I), he said. It was represented by various organisations, including the Department of Standards Malaysia, health Ministry and the national Pharmaceutical Bureau. This halal value proposition comes on the back of the government’s current campaign to incorporate halal considerations towards achieving an integrated halal lifestyle. The guidelines will also serve the growing Muslim market with 1.8 billion Muslims worldwide and a lucrative market worth uSD2.3 trillion. |SOURCE: BERNAMA, 2 MARCH 2011

BuSIneSS PaKISTan

ECC RATIFIES AMENDMENTS IN TRADE POLICY economic Coordination Committee (eCC) besides issuing approval for amendments in trade policy has all the same endorsed guarantee of rs. 1.5 billion for construction of Textile City at Port Qasim in a meeting, Geo news reported. The meeting was chaired by Dr. abdul hafeez Sheikh in Islamabad. a total of eighteen amendment points were approved during the meeting, according to which, the medical equipment used for tests in laboratories, pressure breaks and its equipment used in train engines and equipment of glassware laboratory and cotton waste may be imported from India. The government The halal Journal | April-June 2011 |

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QaTar’S ShocK Even before Qatar’s shock decision, the Islamic finance industry was expected to grow by between 15 to 20 per cent a year, PricewaterhouseCoopers said in a report in November. If Qatar’s move to separate conventional and Shariahcompliant operations is mirrored by other central banks eager to prove their commitment to the nearly USD1 trillion Islamic finance industry, this will be higher. |SOURCE: REUTERS, 11 MARCH 2011

will spend rs. 50 crores on the purchase of land for construction of Textile City at Port Qasim. equity investment worth uSD1.5 crores has also been sanctioned for hollandbacked investment in Pakistan to be spent by engro on export of halal food items to holland. also, the eCC was assured of the import of 12,000,000 tonnes of sugar latest by 12 March. |SOURCE: GEO.TV, 2 MARCH 2011

ISlaMIC FInanCe malaYSIa

EARLY PAYOUT FOR CRITICAL ILLNESS Great eastern Takaful Sdn Bhd has launched the country’s first Takaful insurance plan that pays at the early stages of various critical illnesses. Known as i-early Payout CriticalCare rider (i-ePCC), the plan is a major rider to be attached to its i-Great Damai plan and its i-Critical Illness Benefit rider (i-CIBr). Its Chief executive officer, Mohamad Salihuddin ahmad, said: “The critical illness rider attached to the current market standard practice, only covers critical illnesses in stages three and four. If detected early, i-ePCC will cover between 10 per cent and 25 per cent of the cost in its early benign stage, based on severity. The current practice does not cover stages 0 to 2 of cancer. This product covers them and other critical illnesses to help the prevention of illnesses

rather than the cure. Currently, 80 per cent of i-Great Damai subscribers have attached the i-CIBr to their plan and Chief executive officer, Mohamad Salihuddin ahmad, hopes 50 per cent of that market will subscribe to i-ePCC as well. he also said Great eastern Takaful was well on its way to achieving its target of rM180 million new business premiums in its first full year of operations. |SOURCE: THE SUN, 4 MARCH 2011

malaYSIa

HONG LEONG GETS BANK NEGARA NOD TO SELL TAKAFUL UNIT hong leong assurance holdings Sdn Bhd has obtained Bank negara approval to sell its takaful unit to Mitsui Sumitomo Insurance Group (MSIG), said hong leong Tokio Marine Takaful Bhd (hlTMT) Chief executive officer, abdul latiff abu Bakar. hla holdings Sdn Bhd, which is part of hong leong Financial Group, owns 65 per cent stake in hlTMT. The move comes as its Japan rival, Tokio Marine & nichido, a unit of Tokio Marine holdings, said it was considering selling its 35 per cent stake in the Islamic insurer to hong leong to end its partnership over strategic differences. MSIG, a whollyowned unit of Mitsui Sumitomo Insurance Co ltd, a unit of Japan’s largest property casualty insurance, said the company would buy a stake in Malaysia’s hlTMT to tap the growing demand for Islamic insurance. MSIG is keen to buy the 35 per cent stake which would build up its presence in Malaysia following its partnership with hong leong Financial Group worth uSD480 millionlast year. |SOURCE: BERNAMA, 2 MARCH 2011

QaTar

ISLAMIC BANKS SET TO THRIVE AFTER QATAR BAN BOOST Islamic finance has been given the boost it needed in the Gulf by a Qatari ban on conventional banks offering Shariah-compliant services. Qatar’s move last month draws a line in the sand between Islamic banks and their conventional peers, which control 83 per cent of the region’s banking assets. even before Qatar’s shock decision, the Islamic finance industry was expected to grow by between 15 to 20 per cent a year, PricewaterhouseCoopers said in a report in november. If Qatar’s move to separate conventional and Shariahcompliant operations is mirrored by other central banks eager to prove their commitment to the nearly uSD1 trillion Islamic finance industry, this growth will be higher. Islamic banks have suffered from Western banks in the region offering Shariah-compliant products, eating into their market share during 2010. now Islamic institutions will no longer have to compete with them for loans and deposits and would potentially be able to buy their Islamic portfolios at favourable terms, Goldman Sachs analyst, Waleed Mohsin, said in a research note. There are clear and immediate benefits for firms such as Qatar Islamic Bank, which could add 35 per cent to its loan book if it captures even 50 per cent of the Islamic assets expected to flood the market following the Qatari central bank’s decision, Jaap Meijer, an analyst at alembichC, said. |SOURCE: REUTERS, 11 MARCH 2011 www.halaljournal.com

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By the passing time. Indeed man is at a loss. Except for those who believe and do good deeds and exhort one another to truth and exhort one another to patience.

4 – 5Th aPrIl 2011

WORLD HALAL FORUM

Stay Tuned 4 – 5th April 2011 WOrlD hAlAl FOrUM KUAlA lUMpUr COnventiOn Centre KUAlA lUMpUr, MAlAysiA World halal Forum Secretariat Tel: +603 6203 1025 Fax: +603 6203 4072 email: info@worldhalalforum.org Web: www.worldhalalforum.org 6 – 7th April 2011 WOrlD hAlAl reseArCh KUAlA lUMpUr COnventiOn Centre KUAlA lUMpUr, MAlAysiA halal Industry Development Corporation (hDC) Tel: +603 7965 5400 Fax: +603 7965 5500 Web: http://whr.hdcglobal.com/whr2011/ 6 – 9th April 2011 MAlAysiA internAtiOnAl hAlAl shOWCAse (MihAs) KUAlA lUMpUr COnventiOn Centre KUAlA lUMpUr, MAlAysiA MIhaS Secretariat Tel: +603 6203 4433 Fax: +603 6203 4422 email: enquiry@halal.org.my Web: www.mihas.com.my 5 – 7th April 2011 iFteCh pAKistAn KArAChi expO Centre KArAChi, pAKistAn Pegasus Consultancy (Pvt.) ltd. Tel: (92-21) 111 734 266 Fax: (92-21) 3241 0723 email: info@foodtech.com.pk Web: www.foodtechpakistan.com 7 – 9th MAy 2011 ChinA internAtiOnAl Green FOOD & OrGAniC FOOD exhiBitiOn ChinA internAtiOnAl exhiBitiOn Centre (CieC) BeijinG, ChinA Shibowei International exhibition Co. ltd Tel: 86-10-85785006-628 Fax: 86-10-51413308 email: foodexhibition11@163.com Web: www.gnfexpo.com.cn/en/index.html 11 – 13th MAy 2011 siAl CAnADA MetrO tOrOntO COnventiOn Centre tOrOntO, CAnADA www.sialmontreal.com Tel: +1(514)289-9669 Fax: +1(514)289-1034 email: info@sialcanada.com Web: www.sialcanada.com/sial/en/index.sn

The world halal Forum (whF) 2011 is expected to see the unveiling of halal 2.0 at this year’s event to be held at Kuala lumpur convention centre (Klcc). Themed “Towards a halal Economy: The Power of Values in Global markets”, the 6th whF is expected to draw delegates made up of business leaders, industry players, top leaders, scholars and government officers. whF has moved out from its patronage and shift into a non-profit entity affiliated with IhI alliance to enable the Forum to take on the role of a change agent, shifting the dynamics of halal industry as it stands.

6 – 7Th aPrIl 2011

WORLD HALAL RESEARCH The 4th world halal research Summit (whr) 2011 from 6th – 7th april 2011 at the Kuala lumpur convention centre will feature conference, poster presentation, exhibition and research commercialisation with the theme, “catalyst for Growth in the halal Industry”. The objective of whr 2011 is to inspire innovation within the area of halal research by providing an international stage for intellectuals and researchers. whr 2011 is an international research event which brings together scientists, researchers, scholars and academicians alike to discuss and exchange ideas on new research findings, emerging technologies, trends, issues and challenges in the global halal industry. This Summit will be a foundation to stimulate technological commercialisation in expanding the halal industry for the benefit of the world.

6 – 9Th aPrIl 2011

MALAYSIA INTERNATIONAL HALAL SHOWCASE (MIHAS) Inaugurated in 2004 with the sole aim of facilitating the sourcing and selling of quality halal consumables, products and services globally, this annual trade fair is in effect the largest congregation of halal industry players. It embraces the halal concept in all its dimensions from pharmaceuticals and herbal products, cosmetics and health care to Islamic investment, banking and takaful. Today, mIhaS is the premier event that is not limited to the aSEan region alone but is also supported internationally by the enthusiastic participation of International Pavilions from countries across the globe. This has equipped mIhaS with the extra edge to break through barriers to enter young developing markets committed to serving the needs of the halal consumer and to reach a quality-conscious generation seeking quality halal food products. mIhaS serves as the best entry point for the world market to penetrate into and flourish in the global muslim and aSEan markets. mIhaS is hosted by the ministry of International Trade and Industry (mITI), and organised by malaysia External Trade Development corporation (maTraDE).

15 – 17th jUne 2011 inDO livestOCK GrAnD City expO sUrABAyA sUrABAyA, inDOnesiA PT napindo Media ashatama Tel: +62 21 865 0962 Fax: +62 21 865 0963 email: didit@napindo.com Web: www.indolivestock.merebo.com 29th jUne – 1st jUly 2011 internAtiOnAl BiO FOrUM & BiO expO jApAn tOKyO internAtiOnAl exhiBitiOn Center (tOKyO BiG siGht) tOKyO, jApAn reed exhibitions Japan Tel: +81-3-3349-8509 Fax: +81-3-3349-4922 email: bioexpo@reedexpo.co.jp Web: www.bio-expo.jp

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www.halaljournal.com

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25 - 29 MAY 2011

9 – 11th June 2011

WORLD OF HALAL 2011 World of Halal returns this year, to complement THAIFEX – World of Food Asia, with a separate zone for Halal product suppliers and manufacturers. With the rapid expansion of the Halal market, this trade fair continues to provide a business platform and networking opportunities in the region and around the world in line with the growing interest in Halal products from the nonMuslim community. World of Halal covers various aspects of the industry including food and beverage, logistics, as well as food technology and catering. Around 100 Halal product suppliers and manufacturers will be showcasing their latest products and technology at the combined fairs of World of Halal and THAIFEX – World of Food Asia 2011.

VIV Turkey VIV Turkey is the leading event of its kind in the world, to be held at the Tüyap Fair Convention and Congress Center Istanbul, Turkey. It is the only international platform that unites all links in the supply chain. It is the place that showcases the latest solutions, trends and technologies in meat production and processing. VIV Turkey will become a platform where all participants in meat production can work together to provide the guarantees consumers are demanding. 23 - 24 MAY 2011

MIDDLE EAST AND NORTH AFRICA (MENA) INSURANCE SUMMIT The MENA Insurance Summit is specially designed to deliver new conclusions about the forthcoming development of insurance market in the region. Attendees of the Summit will have a unique opportunity to be involved in discussions with local and global market leaders and to gain inspiration from the most successful case studies of the MENA region.

> Read more... PAGE 18

> Read more... PAGE 20

flashback 25 - 27 FEBRUARY 2011

2nd PENANG INTERNATIONAL HALAL EXPOSITION & CONFERENCE (PIHEC)

Under the patronage of His Excellency Chancellor Rashed Abdul Mohsen Al-Hammad, Deputy Prime Minister for Legal Affairs, and Minister of Justice, the Minister of Awqaf and Islamic Affairs, the First Gulf Conference on Halal and its Services was held from 24 to 26 January 2011, at the Holiday Inn Hotel, Salmiya, Kuwait. This conference was part of Kuwait’s genuine interest in reviewing the Islamic, scientific, economic and commercial aspects relating to the Halal industry and its services. The organisers also share these noble interests and therefore wished to prepare recommendations that have proper grounds in Shariah, are scientifically substantiated, and applicable. Moreover, the organisers believe that all these efforts are exerted to promote safe and sound Islamic support for the Halal industry and its services.

The 2nd Penang International Halal Exposition & Conference (PIHEC) was held in Penang from 25 to 27 February 2011. This annual event, enlisted under the Penang Trade Events, comprised a Halal Expo and Conference held simultaneously. The Halal Expo was showcased at the Penang International Sports Arena or PISA (25-27 February) while the Halal Conference was organised at Eastin Hotel Penang (26 February). The Halal Conference, themed ‘Creating Opportunities through Halal Research’, featured renowned experts from international and local research institutions, universities and private bodies to help introduce innovations and generate solutions in the ever-growing Biotech and Life Sciences industry. Dr. Hamid Jalil (CEO, Lahore Meat Company of Pakistan), Associate Professor Dr. Winai Dahlan (Chulalongkorn University) and Associate Professor Pairat Watcharapun (Prince Songkla University) were among the speakers for the Conference.

> Read more... PAGE 16 : : > Read more.... PAGE 73

: : > Read more.... PAGE 73

24 - 26 JANUARY 2011

FIRST GULF CONFERENCE ON HALAL & ITS SERVICES

www.halaljournal.com

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Event highlights EVENT: FIRST GULF CONFERENCE ON HALAL & ITS SERVICES DATE: 24 - 26 JANUARY 2011 VENUE: HOLIDAY INN HOTEL, SALMIYA, KUWAIT

Arab countries eyes on Halal

as well as the dialogues, discussions and interventions that took place in the conference have all resulted in the following recommendations: Establishing a unified Gulf office with a mission to oversee the Halal industry and its services. The GCC Standardization Organization (GSO) will act as the Technical Secretariat. The office will also establish corresponding national committees to be formed in each of the member states comprising of religious, scientific, and enforcement bodies. The head of the committee will be a member in the Office. The Office will set its objectives and mechanism of functioning. Members from outside the Office may also be invited to participate in its activities. Work on the standardisation of control procedures to verify the Halal-ness (permissibility) of imported food products

Under the patronage of His Excellency Chancellor Rashed Abdul Mohsen Al-Hammad, Deputy Prime Minister for Legal Affairs, and Minister of Justice, the Minister of Awqaf and Islamic Affairs of Kuwait, the First Gulf Conference on Halal and its Services was held from 24 to 26 January 2011, at the Holiday Inn Hotel, Salmiya, Kuwait. This conference was part of Kuwaitâ&#x20AC;&#x2122;s genuine interest in reviewing the Islamic, scientific, economic and commercial aspects relating to the Halal industry and its services. The organisers (Ministry of Awqaf and Islamic Affairs of Kuwait, Kuwait Institute for Scientific Research and GCC Standardization Organization) also share these noble interests and therefore wished to prepare recommendations that have proper grounds in Shariah, are scientifically substantiated, and applicable. The papers presented The Halal Journal | April-June 2011 |

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for the GCC common market and coordinate the exchange of information with other Muslim countries. The Conference calls for providing the necessary financial support for scientific research centres and universities to conduct research on ways to detect Haram (prohibited) materials in the foods, considering the great need for such findings in substantiating the religious decisions adopted by the Islamic jurisprudence bodies. The Conference recommends applying caution with the use of stunning methods as much as possible and alternatively advocates wider use of hand slaughtering, with emphasis on the enforcement of the Islamic jurisprudence bodies resolutions, and in particular the Decision of the International Islamic Fiqh Academy No: 95 (3 / 10).

Photo: Abdulaziz Almansour

The Conference reaffirms the right of consumer to know the slaughtering method used to be written clearly on the food label.

The Conference reaffirms the right of consumer to know the slaughtering method used to be written clearly on the food label. The Conference calls on regulators to pursue enforcing standard specifications for Halal products and increasing periodic field visits to the concern factories and slaughterhouses. The Conference recommends referring the scientific papers presented throughout the conference sessions on stunning methods to the International Islamic Fiqh Academy for review and appraisal. The Conference calls on Muslim businessmen and investors to invest in the Halal industry and its services given the need of the Islamic nation for this industry.

www.halaljournal.com

3/26/11 9:36:53 AM

Event highlights EVENT: 2nd PENANG INTERNATIONAL HALAL EXPOSITION & CONFERENCE (PIHEC) DATE: 25 - 27 FEBRUARY 2011 VENUE: PENANG INTERNATIONAL SPORTS ARENA (PISA), MALAYSIA

The Halal Conference, themed ‘Creating Opportunities through Halal Research’, featured renowned experts from international and local research institutions, universities and private bodies to help introduce innovations and generate solutions in the evergrowing Biotech and Life Sciences industry. The 2nd Penang International Halal Exposition & Conference (PIHEC) was held in Penang from 25 to 27 February 2011. This annual event, enlisted under the Penang Trade Events, comprised a Halal Expo and Conference held simultaneously. The Halal Expo was showcased at the Penang International Sports Arena or PISA (25-27 February) while the Halal Conference was organised at Eastin Hotel Penang (26 February). PIHEC 2011 was supported by three media partners – OIC Today Magazine, Millenia Muslim Magazine and The Halal Journal. Dagang.Net – an aggressive Halal portal info-service provider was the main sponsor together with other co-sponsors like Barkath Group and Putree Bridal. The much-awaited event highlighted the awarding of ‘HALMAS Status’ to Penang Industrial Halal Park by the Halal Industry Development Corporation (HDC). www.halaljournal.com

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This recognition establishes Penang Industrial Halal Park (located in Bukit Minyak, Penang) as a ‘Designated Halal Park’ in Malaysia. Also, a special announcement took place during the Expo ceremony to signify an initial collaboration between Halal Penang and Dagang.Net for continuous advancement in the Halal industry. PIHEC 2011 recorded 90 exhibition booths and 43 kiosks during the three-day Halal Expo. Exhibitors include food and beverage entrepreneurs, banking and insurance sectors (Maybank, SME Bank, Affin Bank, Bank Rakyat, Takaful and Amanah Rakyat), Life Sciences and Pharmaceutical industries, HDC, Forestry Department, Malaysian Industrial Development Authority (MIDA), MATRADE, Kontena Nasional, Penang Port as well as beauty and personal care businesses. The Halal Expo comprised participations from Russia, Iran, Pakistan, Thailand,

Indonesia, World China Muslim Association, Kyrgystan and Korea. A 56-member trade delegation of business leaders and senior corporate officers from IRPC Public Company Limited of Thailand headed by Mr. Sahaschai Panichapong, was warmly welcomed with a brief presentation by Halal Penang after touring the exhibiting booths. Daily showcase at the Expo included culinary showcase by Eastin Hotel Penang, Muslim apparel demonstration, beauty, personal care and reflexology by the Malaysian Blind Development Association together with some lively traditional band entertainment from the Galapagos and various other exciting programmes on stage. The Halal Conference, themed ‘Creating Opportunities through Halal Research’, featured renowned experts from international and local research institutions, universities and private bodies

to help introduce innovations and generate solutions in the ever-growing Biotech and Life Sciences industry. Dr. Hamid Jalil (CEO, Lahore Meat Company of Pakistan), Associate Professor Dr. Winai Dahlan (Chulalongkorn University) and Associate Professor Pairat Watcharapun (Prince Songkla University) were among the speakers for the Conference. The staging of PIHEC 2011, with the Islamic Religious Department of Penang (JHEAIPP), Penang Development Corporation (PDC) and Indonesia-MalaysiaThailand Growth Triangle (IMT-GT) being the supporting organisers, sets to pave the way for the State to grow as a leading international Halal R&D Centre. The State Government of Penang, through its facilitation agency – Halal Penang, has been earnestly striving for continuous advancement in the local Halal industry towards establishing Penang as a ‘Global Halal Centre’. The Halal Journal | April-June 2011 |

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Event highlights EVENT: WORLD OF HALAL 2011 DATE: 25 - 29 MAY 2011 VENUE: IMPACT EXHIBITION CENTER, BANGKOK, THAILAND

World of Halal Conference to focus on marketing Halal around Asia, Europe & the Middle East approach this year in the areas of marketing Halal needs around Asia, Europe and the Middle East. The conference will also cover areas pertaining to regulatory framework of respective Halal markets, marketing strategies, branding and useful tools relevant to Halal businesses with specially tailored keynote addresses from key industry players from the Halal market in Asia. Organised by Koelnmesse Pte Ltd, the conference aims to help participants with little or no knowledge in the Halal market to deepen their understanding as well as the opportunity to network with other like-minded professionals. THAIFEX – World of Food Asia is organised annually by Koelnmesse Pte Ltd, Department of Promotion Thailand and Thai Chamber of Commerce.

World of Halal returns this year, to complement THAIFEX – World of Food Asia, with a separate zone for Halal product suppliers and manufacturers. With the rapid expansion of the Halal market, this trade fair continues to provide a business platform and networking opportunities in the region and around the world in line with the growing interest in Halal products from the non-Muslim community. World of Halal covers various aspects of the industry including food and beverage, logistics, as well as food technology and catering. Around 100 Halal product suppliers and manufacturers will be showcasing their latest products and technology at the combined fairs of World of Halal and THAIFEX – World of Food Asia 2011. Mr. Noel Shield, CEO of the Brunei Halal Brand, commented during his last visit, “THAIFEX – World of Food Asia is the biggest and most important international food and beverage trade fair in Asia. It is also the best as it attracts and connects traders, distributors, and the average consumer in one place without compromising quality.” In addition to the trade fair, the World of Halal conference will take on a more focused The Halal Journal | April-June 2011 |

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The consolidation of strengths and expertise between these three co-organisers has brought about the continued success of this trade fair. Since it was first organised between Koelnmesse, Thai Chamber of Commerce and the Department of Export Promotion in 2004, THAIFEX – World of Food Asia has grown by over 41 per cent in terms of exhibitor numbers between 2004 and 2011. It is now

recognised by the global food and beverage industry as a key trade event in Southeast Asia. World of Halal 2011 will be held alongside THAIFEX – World of Food Asia from 25 to 29 May 2011 at Impact Challenger Halls 1 to 3 in Bangkok. The first three days of the event are reserved for trade visitors only. For more information, log on to www.worldoffoodasia.com.

www.halaljournal.com

3/26/11 9:37:10 AM

PENANG HALAL INDUSTRIAL PARK The Penang Halal Industrial Park was officially launched in 2008. Nestled in the south of the greater Bukit Minyak Industrial Park and the Penang Science Park, the 100-acre Halal Industrial Park is a key growth node in the development of Penang as an International Halal Hub. Strategically located along the North-South Highway, the Penang State targets investors involved in niche, high-value added manufacturing and processing. Future phases of the Halal Park will provide an incubation system, shared facilities, test labs, warehousing and cold chain services. PIHH Development Sdn. Bhd (“Halal Penang”), an agency of the Penang State, manages the Park, which offers investors tremendous potential to tap the increasing local and international demand for Halal products.

Features of the Penang Halal Industrial Park i.

Abundant supply of Halal raw material that can be assessed locally and internationally within the IMT-GT region ii. Fast-tracked approval for Halal certification by the Penang State Islamic Affairs Department iii. Halal Penang acts as a one-stop centre to assist investors on Halal certification, local authority approval, customs, and promotion. iv. Excellent accessibility to the North-South highway and strategically located within close proximity to Penang Halal Port and the Penang International Airport. v. All basic infrastructure such as service roads, telecommunications, water, broadband, sanitary sewerage and electricity are in place. Land at the Penang Halal Industrial Park is available for purchase at RM18 per sqf for a lease period of 60 years. The Penang State welcomes investments of strategic, niche and high-technology industries. Current tenants of the Park include producers of frozen seafood products, herbal extracts, food additives and confectionery. PIHH Development Sdn. Bhd (829043-W) Level 44, KOMTAR, 10503, Penang, MALAYSIA. Tel : +604-262 5444 Fax : +604 – 263 5444 Website : www.halalpenang.com Email : secretariat@halalpenang.com

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Event highlights EVENT: MIDDLE EAST AND NORTH AFRICA (MENA) INSURANCE SUMMIT DATE: 23 - 24 MAY 2011 VENUE: DUBAI, UAE

The MENA Insurance Summit is specially designed to deliver new conclusions about the forthcoming development of insurance market in the region. Attendees of the Summit will have a unique opportunity to be involved in discussions with local and global market leaders and to gain inspiration from the most successful case studies of the MENA region. Among the key speakers are: • Michael Gertsch, Gulf Re Chief Underwriting Officer • Matthew Waterfield, Friends Provident General Manager, Middle East & Africa • Stuart Leatherby, Aetna Global Benefits Head of Middle East & Africa Business • Syed Arshad Ali, State Life Insurance Pakistan Executive Director (Marketing) • Samir Abdul Ahad, ADNIC Deputy CEO & CEO of USRME • Ajmal Bhatty, Tokio Marine Middle East Limited President & CEO • Chris Charman, Institute of Risk Management (IRM) Deputy Chairman • Omer Hassan Elamin, ORIENT Senior Managing Director • Dr. Saleh J. Malaikah, SALAMA - Islamic Arab Insurance Company Vice Chairman & CEO • Hussein Almeeza, AMAN Managing Director – CEO

• Tim Shields, Chartis General Manager • Akshay Randeva, Qatar Financial Centre Authority (QFCA) Director of Reinsurance and Captives • Eng. Salah Salem Bin Omair Al Shamsi, Al Khazna Insurance Co. Vice Chairman • Derek Fulham, Dubai Financial Services Authority (DFSA) Associate Director • Dermot Dick, XL Group Senior Vice President and Manager Middle East Key topics to be discussed include: • How to take advantage from changing regulatory environment • Discussing the successful strategies on case studies • Learning to take advantage from changing regulatory environment from the market leaders, sharing the experiences • Effect of Solvency II on the local capital requirements • Why do the re-insurance rates remain low in the East-Asian market • Discovering new business opportunities by achieving more proactive role of regulators • Comparison between regional company results through the crisis • The future strategy of Takaful and Re-Takaful insurance • How to optimise sales and distribution processes in insurance and Bancassurance • Reminding the importance of underwriting practices For more information, go to www.fleminggulf.com.

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Event highlights

IHI Alliance in Pakistan & Kuwait, plus 1st technical meeting for Muslim-Friendly Hospitality Services module The International Halal Integrity Alliance ( IhI allIancE ) is an international, non-profit initiative created to present the international halal industry players with one definitive voice. The IhI allIancE’s mission is to strengthen the halal market and uphold the integrity of halal for the benefit of all.

Finance and scientific innovation. The Grand mufti of Bosnia and herzegovina, Dr. mustafa ceric, delivered a keynote address, calling Pakistan halal goods producers to seriously consider tapping into the diverse European market where muslim populations are dominated by immigrants. Pakistan, being geographically strategic to become a regional hub that connects the arab world and central asian countries, is poised to capture the global halal market but must first develop strong capacities of technical knowledge, data insights, government commitment and public-private partnership.

PAKISTAN’S FIRST GLOBAL HALAL CONGRESS International delegates consisting of renowned scholars, scientists, industry players and subject matter experts from 17 countries gathered at Pakistan’s first Global halal congress (Ghc) in Karachi on 4 December 2010. jointly organised by the Trade Development authority of Pakistan (TDaP) and Pakistan’s halal Development council (hDc), the event passed congressional resolutions urging for the Pakistan government’s more active role in halal accreditation, stricter food import requirements, Islamic

cEo of the International halal Integrity (IhI) alliance, Darhim hashim was one of the key speakers at the event that was considered the first ever international conference on halal to be held in the country. In his presentation, Darhim spoke about the current value of global halal trade, the rising awareness of modern muslim consumers and the challenges currently faced by the industry. according to Darhim, in the world’s most discerning markets such as Europe, muslim consumers also expect issues such as animal welfare, biodiversity, eco-ethical, fair trade and socially responsible corporate

governance to be taken into account and embodied within the whole halal production chain. he stressed that while awareness is increasing, the conception of ‘halal’ or ‘what is halal’ becomes polarised at the same time, which led to different interpretations, causing confusion and misunderstanding. Pakistan’s emergence as a new aspiring player in the global halal industry has sparked a new “halal movement” in the country that has a 98 per cent muslim population. TDaP is currently drafting a halal certification Bill aiming to build export capacities of locally produced halal

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Event highlights 02

products to become globally competitive. The event also saw the launch of “Halal Pakistan” and twelve memorandums of understandings (MoUs) signed between Pakistan’s HDC and international Halal certification bodies, research centres and scientific laboratories. THE FIRST GULF HALAL INDUSTRY AND ITS SERVICES CONFERENCE After three days of dialogues and discussions, the First Gulf Conference on Halal industry and its Services 2011 concluded with speakers and participants calling for the establishment of a Gulf-based mission office to oversee the Halal industry, standardise importation procedures for Gulf Cooperation Council (GCC) for six Arab states i.e. Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and United Arab emirates (UAE) and a greater role for the International Islamic Fiqh Academy. Jointly organised by the Ministry of Awqaf and Islamic Affairs of Kuwait, the Kuwait Institute for Scientific Research (KISR) and GCC Standardization Organization (GSO), the event was held from 24-26 January 2011 at Holiday Inn Hotel, Al-Samiyah Kuwait under the patronage of His Excellency Chancellor Rashed Abdul Mohsen Al-Hammad, Deputy Prime Minister for Legal Affairs, and Minister of Justice and of Awqaf and Islamic Affairs in the State of Kuwait. The conference brought to light some of the familiar topics concerning the Halal industry. It gathered some of the world’s most renowned figures from the Halal industry to deliberate on critical issues including the www.halaljournal.com

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01: Audience and press at the opening ceremony of The First Gulf Halal Industry and its Services Conference 02: MHFS second technical meeting in session 03: Participants at MHFS technical meeting, touring the Muslim-friendly DePalma Hotel in Kuala Lumpur, Malaysia 04: Speakers at the Gulf’s first Halal conference in Kuwait. From left: Dr. Mohammad Fouad Albarazi, Director of Muslim Association in Denmark; Amir Sakic, Director of Halal Quality Certification Bosnia & Herzegovina; Dr. Mah Hussain-Gambles of SAAF Pure Skincare, UK; Norhaizam Md. Sani of HDC, Malaysia; Dr. Hani Mansour Al-Mazeedi of KISR Kuwait; and IHI Alliance’s Dino Khalid

05 06

05: Darhim, one of the key speakers at Pakistan’s Global Halal Congress 2010 delivering a presentation on global Halal trade 06: Darhim presenting the first paper of the conference entitled “Introduction to the Global Halal Industry and Its Services” after the opening ceremony

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Event highlights 01 EVENT PARTICIPATION OF IHI ALLIANCE AROUND THE GLOBE: 4 – 5 April 2011 WORLD HALAL FORUM Event profile: The World Halal Forum (WHF) 2011 is expected to see the unveiling of Halal 2.0 at this year’s event to be held at Kuala Lumpur Convention Centre (KLCC). Themed “Towards a Halal Economy: The Power of Values in Global Markets”, the 6th WHF is expected to draw delegates made up of business leaders, industry players, top leaders, scholars and government officers. WHF has moved out from its patronage and shift into a non-profit entity affiliated with IHI Alliance to enable the Forum to take on the role of a change agent, shifting the dynamics of Halal industry as it stands. 6 – 9 April 2011 8th MALAYSIA INTERNATIONAL HALAL SHOWCASE Event profile: Considered as the largest Halal trade exhibition in the world, Malaysia International Halal Showcase (MIHAS) 2011 will bring together top global Halal players. The event will feature the entire Halal supply chain from cosmetics and health care, herbal products and pharmaceuticals, to Islamic investment, banking and takaful. The event is expected to have more than 500 leading exhibitors taking part and will display a spectrum of Halal products & services from over 25 countries with more than 600 exhibition booths being made available.

01: Malaysian delegates with Dr. hani Mansour al-Mazeedi of KISr Kuwait 02: Darhim with Dr. abdulqahir Mohammad Qamar, Director of the Department advisory, Investigation and Copyright from the International Islamic Fiqh academy

25 – 29 May 2011 THAIFEX – WORLD OF FOOD ASIA, BANGKOK Event profile: THAIFEX – World of Food Asia is an international trade fair showcasing food and beverage, food catering, food technology, hospitality services, retail and franchise. Scheduled to be held in Bangkok, Thailand, this regional edition is the leading trade platform in the South East Asia for the global players to meet and network. Based on the world’s largest food and beverage trade fair, ANUGA in Cologne, Germany, THAIFEX – World of Food Asia is the one-stop event for all in the food and beverage industry. (Read more about this event on p18).

use of stunning, mechanical slaughtering, chemical status of ingredients and harmonisation of standards in view of promoting greater integrity for halal and its related services. The first paper of the conference was delivered by cEo of IhI alliance, Darhim hashim, who presented the latest updates on the current state of the halal industry as well as analysis of Gcc countries’ recent halal trade. according to the findings presented by Darhim, the Gcc countries have among the highest gross domestic product (GDP) per capita amongst other organisation of the Islamic conference (oIc) member countries. “The self-sufficiency level is generally less than 10 per cent, except Saudi arabia

26 – 28 May 2011 MOSCOW HALAL EXPO Event profile: Organised by the Russia Mufties Council, the Moscow international Halal Exposition has become a place where the representatives of Russian and foreign companies gather for business presentations, seminars and roundtable meetings. The expo aims to bring together Halal, Islamic Finance, banking and insurance all under one roof. Other interesting programmes include a showcase of new trends in Muslim-led lifestyle such as fashion, culture and music 7 - 9 June 2011 WORLD ISLAMIC ECONOMIC FORUM, KHAZAKHSTAN Event profile: Kazakhstan is set to become the first ever Central Asian nation to host World Islamic Economic Forum (WIEF) in its capital Astana. The 7th WIEF will feature forum highlights that include the Leadership Panel to discuss entrepreneurship as a vehicle of growth, a signature ‘Countries in Focus’ Session showcasing business, trade and investment opportunities in selected developing OIC countries and Parallel Sessions covering Islamic banking, infrastructure development, SMEs, Halal ecosystem and alternative energy. (Read more about this event on p66).

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(40 per cent), which means total imported food can easily stand at uSD30 to 35 billion annually,” said Darhim. he added that halal certified foods are scarcely available in non-oIc countries and any regulation to protect the interest of halal for minority muslims in these countries is almost non-existent. Instead, halal has had to endure countless negative attacks on issues such as stunning by activists who lack a thorough understanding of the process involved. MHFS 2nd TECHNICAL MEETING after the first technical meeting in october 2010, the IccI-IhI alliance halal Standard new module on muslim-Friendly hospitality Services (mFhS)

was brought to the De Palma hotel in Kuala lumpur on 16 December 2010 for a second round of discussion. hosted by the halal Industry research centre of International Islamic university of malaysia (IIum), the meeting presented the draft mFhS module developed from the first meeting. Dr. noriah ramli from IIum’s Department of Private law chaired the session together with mr. azudin Khalid, IhI alliance’s Senior manager for Standards and Systems Development. The meeting assembled representatives from universities, associations and industry players to deliberate on several key issues on Shariah and technical requirements as well as establish halal critical control points to be incorporated into the module. mr. Fazal Bahardeen, cEo of Singapore-based muslim friendly travel and hospitality popular website crescentrating, was also invited to present a paper on the company’s proprietary rating system to rate travel and tourism facilities and services. crescentrating’s rating system allows consumers to make informed choices when looking for halal-friendly services and facilities. after the morning session, the management of the De Palma organised a short tour around the hotel to view some of its recently upgraded muslim-friendly facilities. The hotel is one of the very few hospitality establishments in malaysia that strives to elevate its products and services through gradual change from conventional towards becoming more Shariah-compliant. The draft mhFS module is expected to be released at the upcoming world halal Forum in april 2011. It will undergo a six-month period of public review before being finalised for submission to the IhI alliance Shariah board.

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Towards a Halal Economy

The Power of Values in Global Markets

These two major developments, Halal Accreditation bodies, and the convergence of the Halal and Islamic Finance sectors will shape the next few years in the Halal market place, and bring the vision of a Halal Economy several steps closer.

The Halal Journal | April-June 2011 |

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c ov E r S To ry

In his keynote address at the 5th World Halal Forum (WHF) in 2010, the Malaysian Prime Minister, Dato’ Seri Najib Tun Razak, made the comment that “We need to think beyond industries and move into the larger realm of a Halal Economy, a value-based economy rooted in trust, integrity and fairness.” Not only does this statement make a good sound-bite, it also makes good sense. However, it certainly begs the question as to what a Halal Economy might actually be, and how might we realistically get there?

s we worked towards designing the content for the 6th whF, we recognised that the theme of a halal Economy actually embraces many of the current elements of our global zeitgeist, or the ‘spirit of the times’. The melt-down of the western financial models, rising food prices, natural disasters and political unrest throughout the arab world as the people shrug off decades of corrupt dictatorships…these elements have created a climate of change and uncertainty that touches every part of the world. and at the same time, there is also a sense of optimism that the chaos itself presents an opportunity to do things in a different way, and the halal movement is becoming an arena that is increasingly finding itself in the middle of these changes.

Words by Abdalhamid Evans Director, World halal Forum

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The halal Journal | April-June 2011 |

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Halal Integrity In the past five years, a great deal of the ‘conversation’ around halal has been on the subject of standards, certification and the various definitions of what actually constitutes halal. Differences of interpretation and application coupled with a lack of any recognisable regulatory structures have led to confusion for the consumers as well as the industry. In a world that is becoming increasingly borderless, the desire to see unified standards is understandable. The raw materials used by our food manufacturers are sourced from all over the world, processed and packaged in various locations, and then distributed into global markets. a recent study in the uSa found that a burger on sale in a fast food chain has ingredients that came from 54 different countries! The idea of a ‘national’ product has taken on new meaning; in fact there is rarely such a thing, except from a branding perspective. however, it was inevitable that in 2006 the major stakeholders in the halal industry should have called for global halal standards. This call was heard at the first whF, and was taken seriously, resulting in the formation of the International halal Integrity alliance (IhI) as a non-national non-profit agency that took on the task of developing base-line standards for the member countries of the organisation of the Islamic conference (oIc).

A recent study in the USA found that a burger on sale in a fast food chain has ingredients that came from 54 different countries! The idea of a ‘national’ product has taken on new meaning; in fact there is rarely such a thing, except from a branding perspective. This task is a valuable and worthwhile one for a variety of reasons, not least of which is that those oIc countries that have not developed halal standards that cover the entire supply chain (i.e. most, if not all of them), can adopt or adapt the IhI standards for their own domestic application. During the course of this development, it has also become clear that the differences in definition and interpretation of halal compliance are not going to disappear. as ahmad adam, President of crescent Foods, himself an Imam as well as an engineer, recently commented, “we have several recognised and acceptable variants as to how we recite the Qur’an, all different and all approved. So why do we think we can have only one way to produce halal food?” Traditionally, in many issues of Islamic jurisprudence, there are differences of opinion, interpretation and application of the law, and these differences are acceptable and well established. almost more important than the final legal judgment is the clear demonstration that it has been arrived at by a correct methodology. The differences in what is regarded as halal, both from the producer’s and the consumer’s perspective, are not going to disappear. There will not be a one-sizeThe halal Journal | April-June 2011 |

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Islamic Finance has excess liquidity and this money needs to be put to work in arenas that are also Shariah-compliant. Why not in the Halal food sector?

In a world that is becoming increasingly borderless, the desire to see unified standards is understandable.

www.halaljournal.com

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From the perspective of Islamic Finance, it seems that Halal is about to be recognised as an asset class.

The development of accreditation bodies within the Halal sector is likely to be the single most effective means to raising the level of Halal compliance around the world.

www.halaljournal.com

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fits-all global Halal food standard that can be used by producers all over the world to gain market access. So, while we will not arrive at one definition and one standard, what we must strive for is a verifiable and transparent application of the particular standard being used. The issue is not, for example, whether the chicken was stunned prior to slaughter, for there are clear and acceptable opinions on both sides. The issue is whether the standard in use was applied in an acceptable and transparent manner. Accreditation and Labelling Effectively, this matter boils down to two major (and doable) issues, namely a) establishing effective and trustworthy accreditation agencies, and b) developing and applying clear labelling policies. Of these two tasks, putting in place effective accreditation bodies remains the most challenging. The development of accreditation bodies within the Halal sector is likely to be the single most effective means to raising the level of Halal compliance around the world. Indeed, it will basically bring the Halal sector into line with the quality assurance procedures used in the rest of the food production industry. This matter is less of an issue in the Muslim majority countries, where the Halal compliance process is effectively managed by the government agencies. While this often brings an inevitable lack of speed and efficiency, from a commercial standpoint, it has the advantage of being monitored and answerable to higher authorities. But this is not the case in the Muslim-minority countries. Separation of religion and state in secular countries means that all issues relating to Halal have to be handled and managed by the Islamic organisations in that country. In reality, this means that the Halal compliance process is often a free-for-all in which the certification bodies end up attempting to take on all three arms of governance themselves â&#x20AC;&#x201C; the legislative, executive and judiciary. They write the law, execute the inspection and pronounce the judgment. Unsurprisingly, this does not work well. In practice, it means that a certification body, even without any clear Halal standard, can conduct the audit, issue the certificate, send the invoice for their services, and in some cases even charge a commission on the sales, all without being answerable to any higher authority. This would be unacceptable in any other branch of any other industry in most parts of the world, and it is not likely to continue for much longer in the Halal sector. In a presentation by Mark Overland, a Global Certifications Manager at Cargill, he stated that what was needed from the Halal certification bodies was: a) clear standards, b) independent third party audits, c) clear transactions, and d) accreditation bodies that can oversee the whole process. From the perspective of the World Halal Forum (WHF), this represents a clear and urgent directive for the Halal sector. The procedures by which Halal compliance is defined and applied has to be re-engineered to ensure that the dignity and integrity of Halal is upheld, to purify the compliance process and to ensure that the public can be confident about what they purchase and consume. This also marks a change of position from the WHF. In the past we were content to create an The Halal Journal | April-June 2011 |

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arena in which these matters could be discussed. now we recognise that we must become a body that can work towards making things happen. Putting our money where our mouth is? The question that has been sitting quietly on the sidelines for so long that it is now ready to be shouted is: “why is there so little connection between Islamic Finance and the halal industry?” Both these sectors have common roots in the Qur’an and the Sunnah; they share the same set of values, they are developing along similar lines, and they encounter similar problems and solutions. Both are Islamic and yet global, involve both muslim and non-muslim, and are expanding faster than their mainstream counterparts. rushdi Siddiqui, Global head of Islamic Finance at Thomson reuters, and one of the few who have seen the inevitability of a convergence, called them ‘twins separated at birth’. and like twins separated at birth, these two sectors have grown at different speeds, and find themselves speaking different languages, so that even while they may acknowledge their common heritage, they find it hard to communicate about how they might get together. But all that seems to be about to change. There appears to be a seasonal shift taking place, a moment in which both the halal sector and Islamic Finance recognise the need to move forward and open up a new chapter. Increasingly, there is a call from within the leadership of the Islamic Financial institutions to find a way for Islamic Finance to become more engaged in the ‘real economy’. as rushdi Siddiqui has pointed out, Islamic Finance does not really reach down to the man in the street and is largely not relevant to the lives of most muslims, as it has stayed in the stratosphere of the banking world. The real economy is at street level, and a great deal of it revolves around food. From the perspective of Islamic Finance, it seems that halal is about to be recognised as an asset class. Islamic Finance has excess liquidity and this money needs to be put to work in arenas that are also Shariahcompliant. why not in the halal food sector? Global unrest affects fuel prices which in turn affect everything else, including, critically, the price of food. The Food Price Index monitored by the Food and agriculture organization of the united nation has hit its highest level since records began in 1990, and it is hard to imagine it dropping. (see article on page 32) The excess liquidity that is locked up in Islamic Finance needs to find the right place to go to work; somewhere that can generate a good return and at the same to remain Shariah-compliant and to do something good for humanity. To do this, Islamic Finance is going to have to take a serious look at the halal food sector where demand outstrips supply, and annual growth is estimated at somewhere between 15 to 20 per cent. one half of the muslim world is pumping oil, sitting on a cash mountain and importing 90 per cent of their food. The other half – that traditionally used to feed the world – is dying of starvation. It will take a change of heart as much as a change of method, but in line with the recent calls The halal Journal | April-June 2011 |

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This is surely a win-win situation for both Islamic Finance and Halal. One side is full of opportunities and needs funds. The other side has funds and needs opportunities.

for Islamic Finance to move more into the realms of venture capital and microfinance, both highly Islamic in essence, these two investment models are clear avenues to engage with the halal food industry in a way that can be of benefit to everyone. Islamic investment in the halal food sector – from boosting agricultural output in the poorer muslim countries, investing in the promising halal food small and medium enterprises (SmEs) that are springing up around the world, to buying into some of the big names in the global food industry – would be a way for Islamic Finance to become a real driver in the real economy. This is surely a win-win situation for both Islamic FInance and halal. one side is full of opportunity and needs funds. The other side has funds and needs opportunity. Is this not what they call killing two birds with one stone? In a halal way, of course. New Business Models for a Halal Economy a recent article in ‘Fast company’ on the inevitability of businesses having to ‘go social’ in the coming years made an interesting point; the companies with the best chance of gaining maximum benefit from social dynamics will be the ones that have these social components ‘baked in’ from the start. I would venture to say that the same will be true in the halal Economy. The companies that put halal compliance at the heart of their business activity will be the ones that have the best chance of success in the halal Economy. currently, the halal sector is dominated by the same companies that dominate the mainstream food industry. It is easier, at present, for a mainstream company to go halal than for a halal SmE to get big. at present. But this dynamic is likely to change over the next few years as the convergence of Islamic Finance and halal matures. Farm-to-fork halal-compliance is likely to morph, albeit slowly, into farm-to-fork-to-finance. The current situation whereby there are companies that are Shariahcompliant from an investment perspective…but you could not eat their food… is matched by those companies whose food you can eat, but that you could not invest in. This disconnect is going to end, sooner or later, and the convergence is going to create a new platform of opportunities for those with sufficient insight and courage to put their money and their mouths in the same place. once halal becomes recognised as an asset class by the Islamic Finance practitioners…and this realisation is dawning as you read this…a halal Index, with an accompanying halal Investment Fund, will not be far behind. whether this manifests in Kuala lumpur, Doha or london…or even new York…remains to be seen.

www.halaljournal.com

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Commodity Speculation: Banking on the Hungry Poor

It cannot be acceptable that the poor man’s meal is the rich man’s derivative instrument.

Words by Abdullah Ibn Musa

The Halal Journal | April-June 2011 |

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ccording to the UN’s Food and Agriculture Organisation, its Food Price Index in February 2011 rose for the seventh month in a row to reach 231, topping the peak of 224 last seen in June 2008. It is the highest level the index has reached since records began in 1990. In 2008, many governments around the world had enough money to fund food subsidies to prevent the price increases trickling down to street level. Now, a couple of years on, most governments do not have the cash to fund subsidies, and the price rises are starting to bite where it hurts, i.e. in the pockets of the people. In a recent interview, Laurie Garret, a Senior Fellow at the Council on Foreign Relations made an analysis of the current food price crisis that is gripping the world, and in particular the poorest among us. She cited four main reasons for the price rises: 1. Expanding middle classes causing greater demand for meat and dairy products, leading to more grain being used to produce animal feed than to feed people. 2. More agricultural land being used for biofuels. We are feeding our cars, and not our people. 3. Speculation in the basic food commodity markets leading to huge artificial price spikes that are good for profiteering, and bad for anyone who actually wants to use these commodities. 4. Severe and unpredictable weather conditions.

he UN’s special rapporteur on the Right To Food, Olivier de Schutter, has remarked that what happened in 2007-8 www.halaljournal.com

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“Prices of wheat, maize and rice have increased very significantly but this is not linked to low stock levels or harvests, but rather to traders reacting to information and speculating on the markets,”

was a “price crisis, not a food crisis”, precipitated by speculation in the financial market that was not linked to insufficient food being produced. He blamed the “inaction to halt speculation on agricultural commodities”. De Schutter is in no doubt that speculators are behind the surging prices. “Prices of wheat, maize and rice have increased very significantly but this is not linked to low stock levels or harvests, but rather to traders reacting to information and speculating on the markets,” he says. The main culprit is the commodity derivative.

ommodities are the actual raw materials while ‘commodities derivatives’ are financial contracts derived from the value of the underlying commodity. At the base of the commodities derivatives bubble is the ‘futures’ contract, which traditionally brought together buyers and sellers in a regulated auction market (like the Chicago Board of Trade in the US), to bid and settle a price for the delivery of a quantity of a commodity at an agreed time and place. This basic futures contract enabled www.halaljournal.com

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commodity sellers, such as farmers and grain elevator operators, to avoid sudden price drops and commodity users or traders to avoid sudden price increases; it was generally regarded as a kind of insurance. But it ceased to work as such after the deregulation of the global agricultural markets.

he consequence of deregulation was to replace local market access for the majority of small farmers with global market access for a

At the same time, speculative investors began hedging their bets on grain futures, driving up prices even further. The biofuels boom has exacerbated speculation and high prices, but that boom would not have been possible without a deregulated global market. Deregulation has brought even bigger players to the derivatives market… the big, unregulated, financial institutions, namely the investment banks – that are not commodity users. These big speculative institutions now

Volume of Corn Futures Contracts, March 2008 Chicago Board of Trade 1,500,000,000 1,125,000,000 1,500,000,000 750,000,000 375,000,000 0

Goldman Sachs & Morgan Stanley

few global transnational companies like Cargill, Archer Daniels Midland (ADM), Bunge, General Mills or Monsanto. After the mortgage crisis that tumbled stock markets across the world, investors put their money instead into commodities, and to cash in on the new biofuels boom. Grain traders started withholding supplies in the hope of higher prices, knowing that grain reserves were down, and prices volatile.

Actual Commodity Traders

dominate the commodities markets much more than the commodity users.

n March 2008, Goldman Sachs (charged for fraud over sales of ‘toxic’ mortgages) and Morgan Stanley owned 1.5 billion bushels of Chicago Board of Trade corn futures contracts, while all the regulated hedgers together owned only 11 million bushels (a ratio of 136:1). These investment

banks operate through commodity index funds that bundle together up to 24 agricultural and nonagricultural commodities in a single investment portfolio that usually bets on prices to go up. As the component contracts are about to expire (90 days for agricultural futures, six months for non-agricultural commodities) the banks sell the contracts to take profits, creating price volatility in the wake of selling. Since 2003, commodity index speculation has increased 1,900 per cent, from an estimated USD13 billion to USD260 billion..

ccording to Mike Masters, fund manager at Masters Capital Management, “We first became aware of this [food speculation] in 2006. It didn’t seem like a big factor then. But in 2007/8 it really spiked up. When you looked at the flows there was strong evidence. I know a lot of traders and they confirmed what was happening. Most of the business is now speculation – I would say 70 to 80 per cent.” Masters, who testified to the US Senate in 2008 that speculation was driving

Deregulation has brought even bigger players to the derivatives market… the big, unregulated, financial institutions, namely the investment banks –that are not commodity users. The Halal Journal | April-June 2011 |

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Commodity Price Surge

Increase in futures prices since Jan 2009 Cocoa

Orange Juice

28.6% New York ($ per tonne) 3500 3000

Sugar

88.8%

2000

Kenya BP1 ($ per kg) 6

120

140

130

120

110

Dec

Jan

2009

Dec

Jan

2009

Dec

100

4 3 2 Jan

2009

Weather cannot be controlled, and failed crops will always drive up prices, and belts get tightened accordingly. But price speculation in basic foods by financial institutions that do not even take possession of the commodities simply cannot be allowed to continue. There is talk about Halal market values, and about developing a Halal economy. In order to make any significant steps in this direction, there has to be a move to end these unacceptable speculative practices. The awful irony is that of the one billion hungry around the world, half are small farmers, a quarter are landless labourers working on plantations and the rest are urban poor who have migrated from rural areas because they can no longer find a living there. It cannot be acceptable that the poor man’s meal is the rich man’s derivative instrument.

At the same time, speculative investors began hedging their bets on grain futures, driving up prices even further.

up global food prices, says the markets are now heavily distorted by investment banks. “Let’s say news comes about bad crops and rain somewhere. Normally the price would rise about USD1 [a bushel], but when you have a 70 to 80 per cent speculative market, it goes up USD2 to 3 to account for the extra costs. It adds to the volatility. It will end badly as all Wall Street fads do. It’s going to blow up.” Halal Sector Responsibility arket speculation in basic food commodities is illegal under Islamic Law. This is a control mechanism to safeguard the poor, to keep basic food prices always within the reach of all members of the society.

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Dec

Jan

2009

Dec

All data as at Dec 18 2009

Source: Thomson Reuters

The Halal Journal | April-June 2011 |

83.5%

Arabica (cents per lb) 150

60 2009

30.2%

New York No 11 (cents per lb) 30

Jan

165.1%

Tea

New York (cents per lb) 140

100 2500

Coffee

f we are to see any meaningful convergence between the Halal food sector and the Islamic 34

There is talk about Halal market values, and about developing a Halal economy. In order to make any significant steps in this direction, there has to be a move to end these unacceptable speculative practices.

Financial sector, there has to be a voice that emerges from this union to put an end to basic food commodity speculation. If we are to have Shariah-compliance in the food and finance sectors, it cannot just take the form of a cosmetic and superficial compliance. We have to dig deep into the matter until we reach the bedrock core values and put some mechanisms in place to protect the right to eat and drink for the poorest among us.

If the large western exchanges are unable or unwilling to regulate this form of speculation, then surely the Muslim world has the resources and the buying power to create a commodity exchange that is regulated by the Shariah rulings that forbid the practice of getting rich by starving the poor. The question only remains as to whether there is the will to do so. If the Islamic Financial sector is looking for a way to become a driver in the real economy, it does get much more real than this.

“Eat of the good things We have provided for you, but do not go to excess in it or My anger will be unleashed on you. Anyone who has My anger unleashed on him has plunged to his ruin.” (Qu’ran 20:81)

*About the Author: Abdullah Ibn Musa is a reliable Halal industry insider, and is a special correspondent for The Halal Journal. Opinions expressed by contributing writers do not necessarily reflect the views of The Halal Journal. www.halaljournal.com

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Conversations

JAKIM’s View on Halal Pharmaceuticals Malaysia has finally developed the world’s first Halal pharmaceuticals standard – the Malaysian Standard for Halal Pharmaceuticals, MS2424:2010 (P). This national standard aims to serve as the basic document of reference for production purposes, incorporating general guidelines for Halal pharmaceuticals, This will help address the Halal integrity aspects in the manufacturing and servicing chain of medicines and health supplements. Additionally, Malaysia is the only OIC (Organisation of the Islamic Conference) country that is a member of the Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-operation Scheme (jointly referred to as PIC/S). The introduction of the MS2424:2010 (P) lends a credible platform for Malaysian players to competitively gain leverage off other Halal markets, especially in other OIC countries. The Halal Journal spoke to JAKIM’s Director General, Dato’ Hj. Wan Mohamad, and JAKIM’s Halal Hub Division Director, Ustaz Zainal Abidin Jaffar, about this long awaited standard.

THJ: What does the MS2424:2010 (P) cover and which classes of products? Dato’ Hj Wan: The MS2424:2010 is a general guideline that describes the requirements and critical areas in the manufacturing and handling of Halal pharmaceuticals. It covers all areas related to the production of Halal pharmaceuticals from processing, handling, packaging, labelling, distribution, storage, all the way to how these products are displayed. This set of guidelines can be applied to the manufacturing of all types of pharmaceuticals, be it a health supplement, traditional medicine or over-the-counter (OTC) products. THJ: Why was it developed? How long did it take to develop this standard? And who was involved in the development of this standard? Dato’ Hj. Wan: We have received many applications from pharmaceutical companies to certify their products Halal. The Muslim community also requested that they should have choices for their Halal drugs and medicines. However, we didn’t have a specific standard for these kinds of products. The Halal Journal | April-June 2011 |

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As of now, the pharmaceutical industry has been very receptive towards this standard, but the impact of this standard on the industry will only be seen once it is fully implemented. Dato’ Hj. Wan Mohamad JAKIM’s Director General

Until now, we are certifying food supplements produced by these companies using the current food standard, MS1500:2009, which is not really appropriate. Therefore, it is timely for us to have this Halal pharmaceutical standard. And this standard can be beneficial to all. It is developed as a general guideline for interested pharmaceutical manufacturers in producing Halal pharmaceutical products. It took about two years to develop this standard and is currently approved as a provisional standard. This standard was developed by a Working Group of Technical Commitee on Halal Food and Consumer Goods, and was tabled in the Industry Standards Committee on Halal Standard (ISC I). Apart from JAKIM, Standards Malaysia and SIRIM Berhad, the development of this standard involved various parties, including government and non-government agencies as well as pharmaceutical producers. Amongst them are Universiti Sains Malaysia (USM); National Pharmaceutical Control Bureau (NPCB); Halal Industry Development Corporation (HDC); Chemical Company of Malaysia (CCM) Berhad; Ministry of Health Malaysia (MOH); Ministry of Agriculture and Agro-based Industry Malaysia (MOA); Ministry of Domestic Trade, Co-operatives and Consumerism Malaysia (MDTCC); Federal Territory Mufti Office, Ministry of International Trade and Industry Malaysia (MITI); Royal Malaysian Customs Department; Federal Agriculture Marketing Authority (FAMA); Malaysian Agricultural Research and Development Institute (MARDI); Universiti Kebangsaan Malaysia (UKM); Universiti Putra Malaysia (UPM); Universiti Teknologi MARA (UiTM); Institute of Islamic Understanding Malaysia (IKIM); Muslim Consumers Association of Malaysia (PPIM); Federation of Malaysian Manufacturers (FMM); and Federation of Malaysian Consumers Association (FOMCA). THJ: Is there a demand from consumers for Halal-certified pharmaceutical products? Dato’ Hj. Wan: There is always demand for Halal www.halaljournal.com

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The MS2424:2010 is a national standard that caters for local pharmaceutical industry, and as of now, we are not yet looking into certifying manufacturing companies overseas. Ustaz Zainal Abidin Jaffar JAKIM’s Halal Hub Division Director

pharmaceutical products. If there is an alternative, there will be a choice. JAKIM has received quite a number of applicants who are manufacturers of traditional medicine and health supplements prior to the development of the MS2424:2010, all of whom were certified under the MS1500:2009 standard. The names of all these producers are available on our website www.halal.gov.my. Ustaz Zainal: From the pharmaceutical industry’s point of view, this goes to show that their consumers are demanding Halal-certified products. THJ: What is the response from the pharmaceutical industry towards the MS2424:2010? Dato’ Hj. Wan: As of now, the pharmaceutical industry has been very receptive towards this standard, but the impact this standard has on the industry will only be seen once it is fully implemented. Ustaz Zainal: An important thing to note is that the Halal standards are not compulsory for local producers; it is a voluntary medium to facilitate businesses in reaching the consumers. THJ: Who, in the pharmaceutical industry, is applying for certification? Dato’ Hj. Wan: Amongst our applicants are companies producing health supplements, traditional medicines, as well as OTC pharmaceutical products. Ustaz Zainal: As previously mentioned, we have certified more than 30 pharmaceutical (traditional medicine and health supplement) manufacturers, such as CCM Pharmaceuticals Sdn Bhd, I Medikel Pharmaceutical Sdn Bhd, CS Progyms Pharmaceutical Sdn Bhd, TAISHO Pharmaceutical (M) Sdn Bhd, White Heron Pharmaceutical Sdn Bhd, NutriHome Pharmaceutical Industries Sdn Bhd, Healwell Pharmaceuticals Sdn Bhd, Multi Herbs Pharmaceutical (M) Sdn Bhd, HOE Pharmaceuticals Sdn Bhd and EUNET Pharmaceutical Sdn Bhd to name a www.halaljournal.com

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few. We do hope that with the implementation of this standard, we will get more top players in the pharmaceutical industry to apply for certification. THJ: Have you received any international or MNC responses towards the MS2424:2010, and what kind of responses were they? Ustaz Zainal: We did not gauge international reviews on this standard. The MS2424:2010 is a national standard that caters for the local pharmaceutical industry and as of now, we are not yet looking into certifying manufacturing companies overseas. Therefore, international pharmaceutical companies must have a manufacturing facility here before they can apply for this certification. Dato’ Hj. Wan: However, with this new standard, it can be assured that there will be international applicants for Halal pharmaceutical certification. THJ: With this standard developed, do you think it can open doors for overseas investment? Dato’ Hj. Wan: It is a good possibility. Halal Pharmaceuticals could be another option for consumers in the Malaysian market as well as international. Ustaz Zainal: Yes, we do hope it will open doors for overseas investments into Malaysia and we believe it will facilitate more investments, especially based on our international reputation with our MS1500:2009. THJ: Do you think it will boost Malaysian exports? Ustaz Zainal: We have high hopes for this, as previously mentioned, but local companies planning to export their products must also be aware of market access or trade regulations and requirements of countries they wish to export to. THJ: Are there any other standards in the pipeline? What in your opinion is the importance of having these other standards apart from protecting the integrity of Halal products and services (facilitate trade, increase quality, etc)? Dato’ Hj. Wan: Apart from this new Halal pharmaceutical standard, the requirements for the PIC/S (Pharmaceutical Inspection Convention and Pharmaceutical Inspection Co-Operation Scheme) will be used as a pre-requisite for Halal certification. This PIC/S is a requirement for GMP (Good Manufacturing Practice) for medicinal products that cover the Tayyiban aspect of Halal pharmaceutical products. Halal is not just in the ingredients or the process per se. It covers everything including safety, hygiene and quality. Ustaz Zainal: Without revealing too much, we at the Industry Standards Committee on Halal Standard (ISC I) are already planning on developing more standards for specific sectors/ products. You can expect at least five more standards to be published in the future. THJ: Do you have anything else to add? Dato’ Hj. Wan: We really hope that this standard will serve its purpose and protect specifically the Muslim consumers, whilst proving beneficial to other consumers in general.

The Halal Journal | April-June 2011 |

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It’s official – everyone wants a piece of the Halal action. If it’s for rewards in the hereafter or revenue generation in the here and now, achieving Halal status is something that many businesses are exploring. Halal as a means for delivering competitive advantage is considered to be an x-factor – which can help expand operations, create new markets and draw in more consumers. The spearhead of this approach has to be through branding. However, what remains unclear is whether companies are pursuing “Halal branding”, or they are branding “the Halal”? The following article reflects on some of the current hurdles, which need to be cleared, in order to deliver Halal Brands – the Halal way Words by Jonathan A. J. (Bilal) Wilson

Halal Hurdles Hurdles

in the race towards wholesome and holy brands

n the shadow of the economic downturn, Halal has been able to increase brand value, relieve constraints associated with barriers to entry, and stabilise fluctuating markets. Muslims, like other ethnic segments, such as the Afro-American market, are seen to exhibit stronger signs of loyalty trans-nationally, which in some cases have acted as a catalyst to draw in wider non-Muslim communities. A clear example of this lies in the booming cosmetics and hair care industry, which originated in the United States and has spread throughout the world, largely supported by music and popular culture. It doesn’t matter where you’re from, what colour you are, or what your hair type is: corn row braids, dreadlocks, twists and lines in your hair are now sported by young people all over the globe. From this, it can be argued that Halal presents an adaptation of existing product, services and The halal Journal | April-June 2011 |

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management approaches – and consumers think in terms of brands. For Muslims, they are also conscious of whether these products and practices are Halal and they want proof. Therefore, the interesting phenomenon spearheading this now, is that the concept and nature of Halal, warrants verification, which is supported by overt branding. Traditionally, Halal was largely held to be self-evident, through the idea that the majority of things are Halal, according to the Quran. Where matters necessitated further investigation, conclusions were rarely derived from branding. Instead, an assessment of Halal arose from examining ingredients, the environment and the individuals involved. However, with so many products and services on the market, from so many sources, it is inevitable that branding becomes a subject of more significance. Brands are conspicuous – they differentiate,

inform and reassure. Furthermore, whilst it could be argued that Muslim minorities and non-Muslim nations should have a greater need for such labelling and reassurances; in fact, this trend also extends to Muslim nations and Muslim majority populations. Halal fever has gripped the psyche of the Muslim consumer and it could be argued that businesses are also reaping the rewards of Muslim piety and risk aversion. So much so, that Halal as a descriptor is being used for more and more commodities, services and activities. Without looking at simply ‘meat and money’, Halal is even being used to describe, amongst other things: milk, water, non-prescription medicine, holidays, washing powder, tissues, cosmetics, websites, music – you name it and they’ll brand it! Also, the race for commoditisation has seen a paradigm shift, where brands are now seeking their consumption, regardless of faith. The key questions

now therefore are: • How does Halal ‘fit’ into the branding world, if at all? • What branding approaches work and can be used? • How much knowledge and how many practitioners exist, with sufficient cross-functional skills, to champion both the Halal and branding? • Who sets the agenda? • How can Halal marketing and branding move forward? Whilst the race has started, rather than there being a clear finishing line ahead, in many cases, it appears that the finishing tape looks more like rows of red tape. The following points consider the questions raised and looks at some of the challenges currently being faced. Hurdle No.1: Halal is not a brand! Many discussions and practices talk of Halal as being a brand – it’s not! www.halaljournal.com

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Figure 1. The Muslim process of decision-making

Figure 2. The paradigm shift towards Halal consumption by all

Figure 3. The Halal hurdles in the race towards wholesome and holy brands

Halal offers much more to humanity. The reason it is argued that this is worrying is because too many labels raise problems in the same way that too few labels do – distractions from core issues, barriers and restrictive business practices. www.halaljournal.com

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also, what is halal branding – does that mean branding in a halal way, or a brand which identifies a product or a service as comprising of halal components? halal is a descriptor and therefore can be termed an ‘Ingredient Brand’, but on its own it definitely isn’t a brand. ordinarily, within branding this wouldn’t be so much of a problem, as we can see ‘Fair Trade’, ‘Suitable for Vegetarians’, ‘Sugar Free’, ‘organic’ and other ingredient brand labels. however, halal is more than a brand. Its meaning in some ways is being constricted by the constraints of current brand theoretical understandings – which focus on classification, identification and economic drivers. as will be discussed later, brands are far richer and more organic in their essence. a strong argument therefore can be made instead for a classification, which says ‘Suitable for muslims’, as this allows for more emotive traits. also, there are already concerns that some products such as sweets, or noodles containing mSG (monosodium Glutamate – a flavour enhancer) are technically halal, but the idea that they are linked to spiritual purity, health and goodness (which halal professes) poses problems in the minds of some consumers. as an extension of this concept, it would be interesting to see how consumers would respond if luxury goods and high fashion choose to adopt halal labelling for their products. Philosophically, an argument can be made for halal encompassing all of these commodities, but do such conspicuous consumption and consumerism sit well with Islamic ideals, which encourage control and moderation of the nafs (self)? The halal Journal | April-June 2011 |

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do – distractions from core issues, barriers and restrictive business practices.

Hurdle No.2: who certifies what is Halal? If an increasing number of products are being classified as being halal through labelling, by who and how should this process be controlled? are they specifically a religious, scientific, governmental, societal, or business issue – or more generally, a collective responsibility? If these issues are not addressed, then the knockon effect is fourfold: (1) Perceptions of what is halal have the potential to be distorted, to the detriment of Islam and muslims; (2) Businesses may be hindered unnecessarily in their ability to market products; (3) consumer cynicism may lead to the mistrust of certain halal products, without reason; and (4) Perhaps even worse, businesses could set the agenda on defining a core aspect of Islamic beliefs and practices.

Hurdle No.3: Social and Branding Responsibilities muslims, whilst wanting to minimise risks in decision-making, through making safe and informed judgements, aren’t afraid to express their views! Single issue politics groups, tactical boycotting, social networking, word of mouth and cultural diversity, all are important elements in the lives of modern muslim consumers. The challenges posed by this, are that businesses are attempting to market to passionate consumers, who largely seek conformity of consumption, but don’t necessarily consume in the same way, have strong cultural views and don’t like to be told what to do. In contrast, the best branding at some stage looks to take risks – in order to differentiate a brand from the pack. Therefore, it’s worth considering how muslim brand professionals are able to take the reigns, offer balance and set the agenda. The market can be grouped largely into two areas: conventional brands that seek halal labelling, and “Born halal” brands that have a tendency to copy existing brands, with minor ingredient, cosmetic and name adjustments. To save the face of any existing products, I’ll illustrate my point with a fictitious example: The namaz chocolate bar, which “helps you work, rest and pray” [think of the mars bar (which does exist), with the strapline: “a mars a day, helps you work, rest and play”]. rather than marketing driving exponential growth of creativity, it’s recycling the same ideas – which will eventually lead to a

collectively also, current trends are leading to a worrying practice where more halal ingredient brands and certifying bodies are being continually launched. This can already be observed with some products, carrying more than one halal label. one brand of powdered milk, sold in malaysia, carries two halal labels: one malaysian and one Thai. It could even be argued, from a religious perspective, whether there is an inherent need for even one halal label?! marketers and politicians alike would most likely argue in favour of this practice, as it offers control, financial and strategic gains. however, we return to the same point – halal offers much more to humanity. The reason it is argued that this is worrying is because too many labels raise problems in the same way that too few labels The halal Journal | April-June 2011 |

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Philosophically, an argument can be made for Halal encompassing all of these commodities, [luxury goods and high fashion], but do such conspicuous consumption and consumerism sit well with Islamic ideals, which encourage control and moderation of the nafs (self)?

decline in innovation. These occurrences often also lead to consumer cognitive dissonance in many instances and are perhaps some of the many reasons why muslim companies find it difficult to maintain a long-term competitive position. namely: many brands looking to target muslims take fewer risks and restrict creative innovation – maybe through lack of knowledge, or to avoid censure. The pressure becomes further compounded by the fact that adding the term ‘halal’ now invites consumers to become religious judges and juries. Because, effectively halal labelling doesn’t just mean permissibility, it also says that the product, service and producer are producing something religiously pure. and, because they are branded as such, products or services could be judged and scrutinised to a greater degree, continually. Hurdle No.4: A good brand is not only your friend, but also human Brand practitioners and academics will tell you that humans are more emotional

than rational. Following this, brands work best when they appeal to our emotional sides. Therefore, good brands are those that are as life-like as you can get them. They not only have identities, but also have complicated personalities, they seek meaningful relationships with us – and these are beyond financial calculations. after all, how easy is it to put a price on a friendship? with this in mind, brands are vulnerable and fallible, just like humans. So a key question is: are Islamic or halal brands making a rod for their own back, because they are making claims that are almost impossible to live up to? Perhaps a better model would be for brands to aim to create an existence that profiles them as muslim. we all know muslims make mistakes from time to time and we are ready to accept and forgive. Therefore, brands may achieve further acceptance and authenticity through: not preaching so much, relaying more stories connected with their own purpose and existence, making use of other emotions such as humour and compassion. www.halaljournal.com

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This is perhaps also why some non-muslim brands fare well when they decide to target muslims at a later date, because they have first invested in relaying a wider range of human emotions. Hurdle No.5: Value brands or value for money? The halal market appears to centre on attempting the impossible goal of delivering a valued brand, with the best of values, which is value for money, and for less money. an underlying feeling exists, both from consumers and some muslim business, which suggests that charging a premium is wrong and may not be received well by the market. one sales pitch used is that “born halal” brands do not overcharge and exploit consumers. The argument here is that this approach restricts the necessary revenue required to build a brand and its market potential. Furthermore, this may hamper a business when attempting to compete on a level playing field – compared with other conventional marketing models. an example of this can be seen with some muslim-owned television stations, which rely on charitable donations and are unable to then generate sufficient revenue through advertising. The eventual conclusions being that the product line declines (not due to demand), or cost measures have to be implemented, which reduce the quality of materials and working conditions. To undo such market dynamics and perceptions will take time and education – but ultimately this can be achieved through brand building, marketing communications and customer relationship marketing (which of www.halaljournal.com

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course require investment and skilled execution). Hurdle No.6: Halal for life, and Halal on a large scale It is worth considering how brands are able to maintain their halal credentials. For example, if an organisation at a later stage is found to be engaging in practices, which are deemed to be incompatible with halal ideals, beyond ingredients: such as running sweatshops and bad management practices – what happens now? of course the argument should be that their halal status should be challenged. however, it is questionable whether the mechanisms are in place to regulate these aspects. on the same note, another area worthy of consideration is: at what level of output do manufacture, production and services begin to diminish in achieving halal exemplars of best practice? It may be possible to certify, and then deliver halal products and services in the beginning – but when demand increases, should a limit be proposed, which is dictated by halal ideas, rather than economies of scale? The Finishing Line: What can be done? For the reasons previously stated and as a core facet of human nature, it is unlikely that all muslims will ever be able to agree on one approach to ‘halal Branding’. Debates continue to run over matters such as the stunning of animals prior to slaughter, the use of alcohol in fragrances, and even philosophical arguments against labelling alcohol-free beers. The position taken here is that these consultation processes and such opinion sharing should be welcomed – but

it should also be assumed that they will carry on indefinitely. Therefore, stakeholders should be encouraged to consider that seeking complete control and consensus are divisive and energy sapping. So,

whilst in theory it is possible to discern what is halal and what is not; when something seeks to carry branding and certification, this becomes more difficult to evaluate.

The following are some suggestions of areas that could be explored in the future. • Further discussions surrounding the unification of certification practices and certifiers. • The role of country of origin and nation branding in communicating brand value. • Think tanks, comprising of religious scholars and brand experts, across schools of thought and market sectors. • Formal consumer-led watchdog groups, using social media. • Expansion and separation of Halal classifications. These could be used to differentiate between products, which are technically halal and those that have additional benefits, associated with health and nutritional values. So for example, some products could achieve halal status, whilst others achieve a label classifying them as being ‘Suitable for Muslims’. In addition, scaling systems could be provided which indicate how much consumption is recommended. • A labelling system and marketing communications approach, which allow for ease of understanding by non-Muslims. and, beyond this, it has the potential to evoke similar positive traits. after all, Islamic thought would argue that halal resonates with all human spirits, regardless of their current belief systems – as all are created with the potential to understand, by allah (swt). however, there still appears to be a paucity of understanding by the wider community, as to what halal covers – other than ‘meat and money’. • Specific academic courses which focus on ‘Muslim Consumer Behaviour’ and ‘Islamic Branding’. • Further research into how brand theories can be used in an Islamic context, allowing for further application of cognitive behavioural psychology, to elicit the more emotional attributes of a brand, without going against the ideals of Islam. Following this, attempts could be made to launch emotive premium high-end luxury brands

**about the author: educated at the university of Dundee, Scotland, Jon has 15 years of collective academic and commercial practitioner experience in: advertising, Branding, new Media, Pr, and Print Media. Jon held previous full-time positions at emap advertising (now Bauer Media), and haymarket Media Group. Jon is currently a Senior lecturer and Course leader in advertising and Marketing Communications Management at the university of Greenwich in london, uK. his current research areas examine: management, cross-culture, sports, religion and music - and the role of branding within these. Jon sits on the editorial advisory Board for Journal of Islamic Marketing (emerald Publishing Group); Journal of Islamic accounting and Business research (emerald Publishing Group); Journal of Muamalat and Islamic Finance research (universiti Sains Islam Malaysia, uSIM); and on the International relations Committee, for Saipa Group’s Department of Culture and Sport, Tehran, Iran. opinions expressed by contributing writers do not necessarily reflect the views of The halal Journal. The halal Journal | April-June 2011 |

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Words by Marco Tieman

After the internet and finance bubble, we are all massively jumping on the next bubble of green technology and eco, or are we really heading for truly sustainable systems and economies?

Going Green from an Islamic perspective

The halal Journal | April-June 2011 |

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In the year 50 BC,

romE ISSuED a DEcrEE aGaInST TraDErS who crEaTED ShorTaGE In GraInS To IncrEaSE ThE PrIcES By FloaTInG vESSElS oF GraIn From EGyPT. FaIlED PoTaTo harvESTS In IrElanD BETwEEn 1845 anD 1850 rESulTED In hIGh morTalITy raTES anD maSS EmIGraTIon To ThE uS. In 1972, ThE rEPorT From ThE cluB oF romE warnED ThaT an unconTrollED EconomIc GrowTh woulD lEaD To nEw ShorTaGES. In 2010, ThE EuroPEan unIon announcED 14 ScarcE raw maTErIalS anD camE uP wITh nEw STraTEGIES To manaGE ThoSE raw maTErIalS.

In that year also, china puts an export stop to scarce raw materials to protect their own needs. on 15 February 2011, The world Bank published the latest Food Price watch, and confirmed that food prices has risen by 15 per cent between october 2010 and january 2011 – that is 29 per cent above its level a year earlier. according to the world Bank, this has driven an estimated 44 million people into poverty in developing countries since june 2010, as food costs continue to rise to near 2008 levels. These, to me, raise a few questions: how do we manage our resources? how can we become a better steward (Khalifah) of this Earth? Shortage of more and more as the world population is growing fast, there is a shortage of more and more. Shortage and scarcity can be argued as an issue of distribution. Some countries have too much, whereas others have too little. like with fresh water, rice, oil reserves, and so on. The problem is however, that www.halaljournal.com

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shortages and scarcity today are often allotted to developing countries (oil, gas, minerals, raw materials and bio-fuels) and the next generation (pollution and depleting of natural resources). Some questions I have: are they, these scarce resources, valued correctly? Do these scarce products have real value or just monetary value? without economic growth our economic system comes to a stop and therefore we have been using scarce and non-renewable resources to finance economic growth. after the internet and finance bubble, we are all massively jumping on the next bubble of green technology and eco, or are we really heading for truly sustainable systems and economies? In search for bio-waste Today, I have seen foreign and international

organisations come to developing countries with nice suits and fancy presentations, in expensive hotels with fancy door gifts, to bring “solutions” for their “bio-waste”. what this means, in practice, is they will “take care” of your rest-products (like palm wastage) and will bring it to destinations far away to be used in their subsidised “environmental-friendly” and “carbon neutral” manufacturing. I call them the highwayman for two reasons. First, they are disrupting the formation of industrial clusters in developing countries – that can have these bi-products as input for other industries that can generate higher value adding industries, income and create low total supply chain costs – as defined by michael Porter as a competitive advantage. Second, they are transporting low value

With an estimated 20 per cent of overconsumption, this would result in about 50 per cent of the food being wasted.

products over long distance, and still argue that this makes environmental sense!! Fresh Water out of all the water on earth, only 2.75 per cent is fresh water, including 2.05 per cent frozen in glaciers, 0.68 per cent as groundwater and 0.0001 per cent of it as surface water in lakes and rivers (source: wikipedia, 2011). as argued by various writers, it has been predicted that the next world war will be about fresh water. Fresh water is indeed a precious resource and many countries today have a shortage of fresh water, of which many are muslim countries. Generating fresh water out of seawater today is still very expensive and requires large amounts of energy. There is some guidance on this from the Qur’an on the use of water (abdul-matin, 2010): “Do you bring it Down (in rain) from the cloud or do we? where it our will, we could make it salty (and unpalatable): then why do you not give The halal Journal | April-June 2011 |

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thanks?” (Qur’an 56:69-70). God not only controls water, but we receive fresh water from the sky, if we do not use it, it can become salt water again (if it flows to the seas). Therefore, it is extremely important to manage fresh water effectively, as a country, as a company and also as an individual.

poverty as proven by the world Bank. household food wastage: Food waste occurs between acquisition (house-gate) and food preparation; between food preparation and food serving; and after food serving (plate waste). according to several studies, we can assume that about 10 per cent of solid foods are being discharged. From my experience, in the food supply chain, an additional 20 per cent wastage should be accounted for. Supply

Food wastage In food wastage, I would like to differentiate between the following three types of wastage: overconsumption wastage, household wastage

Energy from hell is energy that is derived from the ground, such as oil, gas, coal, which is non-renewable. Energy from Heaven comes from above, such as wind, sun, waves, which is renewable. and supply chain wastage. overconsumption wastage is consuming more than you need. although, the Qur’an provides a very clear guidance on wastage, “But waste not by excess, for allah loves not the wasters” (Qur’an 7:31), it is important to realise the practical consequences it creates in today’s world, namely: 1} Too high level of consumption leads to “welfare diseases” such as diabetes, certain types of cancer, and so on. 2} more consumption than necessary leads to extra wastage of natural resources (of which some are non-replaceable) and have negative impact on the environment. 3} overconsumption leads to higher demand for food and natural resources, which leads to higher prices and directly results in more The halal Journal | April-June 2011 |

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chain waste happens at the farm, the factory, by the transporter, in the warehouse and in the supermarket or restaurant. with an estimated 20 per cent of overconsumption, this would result in about 50 per cent of the food being wasted. Therefore, much can be achieved already today by Governments, industries and individuals in reducing poverty worldwide by reducing our wastage in food. Energy from Hell and Energy from Heaven I was inspired by the book I recently read by the american author, Ibrahim abdul-martin, called “Green Deen: what Islam teaches about protecting the planet”. In his book, he introduces the term “energy from hell and energy from heaven”. according to him, energy from hell is energy 44

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that is derived from the ground, such as oil, gas, coal, which is nonrenewable. Energy from heaven comes from above, such as wind, sun, waves, which is renewable. In my opinion oil, gas and coal are not valued correctly and are still sold too cheaply today by, especially, developing countries. The consequence of this practice is threefold: 1} there is little incentive for the industry to move to more sustainable sources of energy; 2} the consumption of energy from hell is only increasing (instead of decreasing), leading to depletion of nonrenewable resources; 3} the true costs of transportation is not reflected in the transportation costs, creating little financial incentive to move to more sustainable ways of transport, and even wastage can be transported cheaply over long distance. I have been very frustrated by companies that are offering carbon neutral flights (by planting some trees in the ground?), environment-friendly transport, environmentfriendly cars and ecoholidays to destinations far away. I believe I can say, I know the logistics industry quite well and I am confident that there is a more sustainable way than trucking nonperishable cargo along a peninsular (which could go via sea), mega refrigerated warehouses without a single solar panel, and budget flights for rm9. It is time for a new paradigm! A new paradigm what does going green really mean from an www.halaljournal.com

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Recognising that water (and fresh water in particular) is a very precious resource, water (waste) management should be high on the agenda of governments and regulated strictly for the industry.

Islamic perspective? First as consumers, we have to show more moderation in our consumption. “Eat of the good things we have provided for you, but do not go to excess in it or my anger will be unleashed on you. anyone who has my anger unleashed on him has plunged to his ruin.” (Qur’an 20:81) Second, we as consumers have to be more conscious on the environmental burden of exotic products we buy that come from far away. In reality, the environment costs are not truly reflected in the prices of these products we buy from the supermarket today. So, be mindful of the so-called “food-miles” of what you are consuming. Third, real innovations in transportation are needed that are less or not dependent on “energy from hell”, which are truly sustainable, that is based on “energy from heaven”. as a sailor myself, I propose to move back, or better said, move forward to sail-driven sea vessels. Today, there are already some kite solutions available in the market for big vessels to use partially sail-driven energy, but I believe it is possible to have more fully sail-driven

cargo vessels. of course, for certain fresh food products, it would not be feasible to send in slower transport over long distance, like your oranges and grapes from the other side of the world, but many things would! Yes, costs might be higher as the vessels might be smaller, but I believe that the consumer would also reward companies that are using these really green transport alternatives and would even be willing to pay for this. Fourth, for the industry, raw materials and ingredients should be sourced not solely based on cost, but also to take the environment into consideration and buy more from shorter distance. Fifth, recognising that water (and fresh water in particular) is a very precious resource, water (waste) management should be high on the agenda of governments and regulated strictly for the industry. we have to go beyond the current green hype and define a better way to go green from an Islamic perspective, so that we do not leave it to the next generation to solve! The good news is that you as a consumer can start already today, and make the difference!

references: abdul-Matin, I. (2010), Green Deen: What Islam teaches about protecting the planet, BerretKoehler Publishers, San Francisco *about the author: Marco Tieman is the founder of lBB International (the netherlands), a logistics consulting-researchsupply chain management firm with offices today in Malaysia, Thailand and the netherlands. he has a M.Sc. in Industrial engineering & Management Science from the university of Twente (the netherlands) and is currently pursuing his Ph.D. in halal logistics at the universiti Teknologi Mara (Malaysia) in collaboration with the Wageningen university (the netherlands). opinions expressed by contributing writers do not necessarily reflect the views of The halal Journal.

The halal Journal | April-June 2011 |

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Conversations from Halal to Tayyib. Something might be lawful, but not really wholesome. But to be really wholesome, it should also be lawful! So in a way, Tayyib includes Halal.

Moving from Halal to Tayyib ~ Trends for both food and finance

With the growing awareness about a greater convergence between the Halal sector and the world of Islamic banking and finance, The Halal Journal took the opportunity to speak to Rafe Haneef, who is the CEO of HSBC Amanah Malaysia and Managing Director for HSBC Amanah Global Markets in the Asia Pacific region.

THJ: At last year’s World Halal Forum, Malaysian Prime Minister Dato’ Seri Najib Tun Razak made the statement that “We need to think beyond industries, and move into the larger realm of a Halal economy”. Can you comment on what this idea means for you? Rafe Haneef: If you are engaged in a Halal business, you cannot just be concerned about whether you have slaughtered the chicken in a Halal manner. You should also be focused on whether your finances are managed in a Halal manner. It is not meaningful if you are only concerned about how you slaughtered the chicken when you have non-Halal financing at the back end. Today you will find there is a hierarchy in people’s general awareness about Halal. Halal food comes first; then Halal drinks, and lastly compliance with Halal finance. We have become so used to interestbased financing; it is difficult to make the shift. If we are going to move towards a Halal economy, we have to take a holistic approach; the whole cycle, the whole chain has to be Halal from the production to the financing. But that is only the first level! THJ: So where does it go from there? Rafe Haneef: We have to move from Halal to Tayyib, from merely being lawful to wholesome and good. The Qur’an makes this distinction, as in the ayat “Oh Mankind, eat from the earth what is Halal and Tayyib”. If Halal included Tayyib, there would have been no need to mention them both. So we really have to shift our focus The Halal Journal | April-June 2011 |

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THJ: That is an interesting perspective, because often people think of it the other way round. Rafe Haneef: This is also the same for financial products and services. There is too much focus on the form. An Islamic bank may provide a service, like car financing, or personal financing and it is done in a way that is Halal but it may not necessarily be Tayyib. If someone uses these things for a beneficial purpose, then it is also Tayyib, but if he uses this financing and gets into financial distress, it is still Halal for the banker, but it is not Tayyib for the customer. In the Western system, the philosophy of the marketplace is Caveat Emptor…buyer beware! People are just pushing all kinds of financial products on to the customer; products that no one even really understands! They may be legally lawful but they are socially useless. That is why we have to make this distinction between lawful and beneficial. Something may be lawful, but it is not rightful. So from our perspective, if we are selling something, we have to make sure that the customer knows what he is buying, and that it is also beneficial for him. So we have a duty to advise that certain products may not actually be good for you. If we simply focus on Halal, we may be satisfying an emotional need of the Muslim customer. But if we really want to move into the mainstream, we have to shift our focus to Tayyib. THJ: It seems that both the Halal food sector and Islamic Finance sector are both going through a similar shift in awareness right now. Rafe Haneef: Yes, both these industries are in the emerging stages, and the market share is still very small, compared to the global market share. So there is naturally a fast initial growth taking place, and then at some point it will start to taper off. In order to keep the growth momentum going, you have to distinguish yourself, and create a niche. If it is just Halal food, or Halal finance, it will stop with the Muslims; it will not have any appeal to the wider world. To really gain a significant market share, we have to move towards the Tayyib aspect. And really, to do this, we cannot just view this as business; we have to take this as a religious and moral obligation, to spread this message and to create a more wholesome life for people. THJ: So how does this shift from Halal to Tayyib translate in the Islamic banking world? Rafe Haneef: It really starts with understanding the customer. It cannot be a product push; it has to be a customer-centric approach. That has been the error of the past, not just in the mainstream banking, but also in the www.halaljournal.com

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Rafe Haneef CEO of HSBC Amanah Malaysia and Managing Director for HSBC Amanah Global Markets in the Asia Pacific region.

To really gain a significant market share, we have to move towards the Tayyib aspect. And really, to do this, we cannot just view this as business; we have to take this as a religious and moral obligation, to spread this message and to create a more wholesome life for people.

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The Halal Journal | April-June 2011 |

3/26/11 9:42:41 AM

This is how it works in the Shariah index. If you meet the requirements, and you are in the index, your stock is classified as an Islamic stock. Now, non-Muslims will buy a stock whether it is Islamic or not because they are looking for a good investment.

Islamic sector, and we have to look beyond that, and take a more advisory role. If we better understand the customer’s needs, we can help him to actually grow his wealth, manage savings for a house purchase, or for his children’s education or for retirement. This is what we are growing towards. THJ: Do you think that the recent economic meltdown of the financial institutions in the West presented an opportunity for Islamic Finance sector? And did they take advantage of it? Rafe Haneef: Unfortunately, we were not able to take full advantage of it. Our philosophy was very clear, that we are supposed to be more equitable, because of risk-sharing, etc… but we were not able to really move on this, because we are still in the Halal mode. So we really looked too much like the regular banks for there to be a real distinction. It was as if our Halal chicken was just the same as a regular chicken. If we had already moved to incorporate Tayyib, we would have been able to really demonstrate that we are a more stable and equitable system. THJ: This idea of moving from Halal to Tayyib… is this something that is just an HSBC idea, or does this reflect a general shift in the wider Islamic banking sector? Rafe Haneef: Well, this is the message that is now being propagated within the industry, but it has not yet picked up steam yet, but hopefully we will see a lot more momentum being generated soon. THJ: Malaysian Central Bank Governor, Tan Sri Zeti, made a statement about wanting Islamic Finance to be a ‘driver in the real economy’. What does that mean to you? Rafe Haneef: Our business is in the real economy. If we take on a client who needs financing to buy machinery, or for more inventories, we will help with this. But we will also ensure that their income is protected. If their costs are in Ringgit, and the sales are in US Dollars, we can help them with the hedging for the currency exchange. For someone buying abroad, what if someone takes your money and does not deliver the goods? We have trade solutions for this. When a business grows, we can also help them find suppliers, or even source strategic investments to secure the supply of raw materials, and complete the cycle. The Halal Journal | April-June 2011 |

Feature.indd 48

THJ: What about the SMEs in the food sector? Are you interested in developing this business for your commercial banking? Rafe Haneef: Yes we are, and this is why we are supporting the World Halal Forum. These SME Halal food producers will need finance to expand, to buy plants and machinery, and to scale up their businesses and go abroad. We can really be a one-stop centre for them. As well as these services, we can help them find importers and exporters in other countries where we have a presence. We can offer a business matching service. We typically hold country-focus forums, for example in Malaysia, and we bring in our counterparts from the region, and link the businesses from different parts of the world. We can then provide the trade and financial services that are required to do the business. We do not just find the opportunities; we can help SMEs take advantage of those opportunities by providing a holistic service. THJ: There has been some suggestion that it is time to create a Halal Index, and Halal Investment Fund, and establish that the Halal sector is a viable asset class for investment. What do you think of this idea? Rafe Haneef: I think this can be done, and it is an interesting idea. I think it would be an attractive investment for most Muslims. The key thing is to translate this into greater revenue for the companies listed in the index. You will have to provide an incentive for companies to be in the index; so that once they are compliant, this translates into a greater volume of business for them. This is how it works in the Shariah index. If you meet the requirements, and you are in the index, your stock is classified as an Islamic stock. Now, non-Muslims will buy a stock whether it is Islamic or not because they are looking for a good investment. Muslims want a good investment that is also Shariah-compliant. So there are two sets of investors, and both of them will buy from the Shariah index, whereas the Muslim investors will only buy from one. So you get a larger pool of investors, and more liquidity. So here in KL, Chinese and Indian businesses also want to be in the Shariah index. Greater liquidity means that your stock trades at a premium. So the same will work for the Halal index, there should be greater sales pick-up. But creating the index is not the hard part. Marketing and promoting it among investors will be important…this will be the challenge. You will need to have the data to support your case, showing the companies that went into the index benefitted in verifiable ways.

www.halaljournal.com

3/26/11 9:43:06 AM

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halal as an asset I cla ss

One of the obvious hidden gems for Muslims is the Halal industry as an investment asset class! Yet there is very little interaction or coordination between Islamic finance and the Halal industry; it’s very much Islamic finance ignoring (a) Halal industry, and (b) Halal industry not speaking the language of Islamic finance. But both are part and parcel of a real asset-based/ backed economy for a Muslim country.

Words by Rushdi Siddiqui

The halal Journal | April-June 2011 |

Feature.indd 50

’ve said it repeatedly elsewhere, halal and Islamic finance are twins separated at birth and possibly reuniting 1,400 years later in, say, tanjung manis halal hub, sarawak, malaysia. the Qur’anic guidelines on halal and interest come from the same chapter; “mankind! eat what is good and lawful on the earth…” (2:168). “… But allah has permitted trade, and he has forbidden usury. … allah obliterates usury…” (2:275-279). today, Islamic finance speaks the language of standardisation, investing, financing, etc., and halal, presently, speaks language of certification, stunning, ingredients, etc., hence, two ships sailing past each other without realising the benefits of synergy via association! [For example, most Islamic finance or halal industry conferences have little or no overlap of the other, but world halal Forum is breaking new ground with the convergence theme!] thus, we, as muslims, are presented with two (of many) unique anomalies: we can consume halal foods produced by a company, but we cannot invest in many halal companies because they do not pass the present shariah-compliant screening financial ratios! halal producing companies continuously finance expansion with ‘conventional’ debt capital, yet Islamic finance/ investors are in desperate need for increasing supply of quality corporate sukuk as part of their portfolio asset allocation.

Islamic & Kosher Islamic Indexes have similar screening to a christian index, Dharma Index, catholic funds, and negative screening of social-ethical investing. and the halal industry can be best compared to the Kosher industry. But, an Islamic investor cannot invest in a christian Index or catholic fund as there is no financial ratio screening in the latter, yet a muslim can consume Kosher foods! thus, halal appears to be a better bridge builder than Islamic investing to the ‘people of the book’. Halal: Demand Based I come from nearly 15 years in Islamic finance, and I look at the halal industry as a demand-based-assetclass-growth story. today, muslims have a deposittaking mentality, risk averse and short-term oriented, if they lose money investing in shariah-compliant companies, say, due to market sell-off associated with crisis, financial or political, some/ many will redeem their moneys, hence, less inclined to be equity investors going forward! Yet, muslims need to

Thus, Halal appears to be a better bridge builder than Islamic investing to the ‘people of the book’. www.halaljournal.com

3/26/11 11:18:17 AM

The follow-up question is: has Islamic asset management created wealth for Muslims that has a trickle-down effect for the benefit of the Muslim country economy? consume food, ideally halal as stated above, and, even if there are crises occurring and prices rising, foods for sustenance are still needed to feed the family. muslim consumers may purchase less or (less expensive) nonbrand name halal goods, but demand will be there. one may possibly say halal is almost counter-cyclical over Islamic investing! Islamic Funds Today, end of 2010, there are close to 580 Islamic funds with about uSD36 billion in assets under management (lipper), but has Islamic investing captured the imagination of the (muslim) man on the street? or is Islamic investing only about bankable muslim customers? The follow-up question is: has Islamic asset management created wealth for muslims that has a trickledown effect for the benefit of the muslim country economy? If we examine Global Islamic indexes from the likes of index providers like mScI, FTSE or S&P, we see nearly 85 per cent of the market capitalisation is in G-20 countries. Islamic funds are off Islamic indexes, so they invest in liquid/ large ‘cap’ companies like apple, BP amoco, Pfizer, Google, etc. obviously such companies are neither headquartered nor (cross) listed in muslim countries; hence, do not give a pulse of Islamic finance! www.halaljournal.com

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Price change in last 25 weeks - march 2010 - march 2011 30.00%

27.52%

25.00%

21.17%

20.00% 15.00% 10.00%

8.05%

5.00% 0.00% Food & Beverages index in the Us

sami halal index

So, do today’s Islamic global funds contribute to (Shariahcompliant) capital flight from muslim countries? Halal Index The SamI (Socially acceptable market Investing) halal index is the world’s first halal (food) index covering publicly listed (halal) companies (initially) from muslim countries. The objective is to start treating halal as an investment asset class, and, as an index it has the Dna for investing via funds. It will show the world that muslims can now invest in companies whose food products they consume. Thus, halal (food) funds or exchange listed funds (ETFs) off of the SamI halal Index are similar to Islamic funds off Islamic indexes. [There will be two SamI halal Indexes: one without the three Shariah screening financial ratios and one with the ratios, called SamI halal Participation Index. why? as we are starting the process of halal indexing, companies should be given time, much like converting a conventional bank to an Islamic bank, to prepare to pass the present financial ratio tests, hence, an inclusionary approach.] halal, much like real estate in Gcc, may be easier to explain and easier to understand compared to Shariah-compliant investing with all the screening, hence, have greater customer traction. additionally,

sami halal Participation index

emerging market local investors tend to invest (or punt) locally as they know such companies much better than companies listed in different countries. as the SamI halal index obtains traction in the marketplace as the first of its kind, it may gather a following as a high profile index for the industry over time. Typically, companies vie to get into high-profile indexes, like S&P 500 or FTSE 100, as they are good for marketing and investor relations. now, this index would present an excellent opportunity for a leading certification body in, say, malaysia to start reaching out to these oIc country halal companies for a common certification process! Industry Body unlike Islamic finance, with globally recognised and accepted industry bodies like aaoIFI, IFSB, IIFm, etc., the halal industry is

As these Halal companies look for growth capital, an excellent opportunity presents itself for convergence with Islamic finance.

presently lacking a global industry body to educate, build awareness, lobby, and so on. an industry funded halal body mandated to promote halal as an investment asset class may well encourage comparable global bodies on the certification issue. Economic Development & Sukuk additionally, oIc country investor money will stay in the oIc countries with local halal companies in the index, hence, adding to the growth and development of the company and its market capitalisation. as a company grows, it will source more materials from more local suppliers, and this knock-on effect positively impacts on employment and local tax collection (where applicable). as these halal companies look for growth capital, an excellent opportunity presents itself for convergence with Islamic finance. Executives of halal companies have stated numerous times that they want access to Shariah-compliant capital to grow, expand, acquire, etc., but unfortunately Islamic finance had neither listened nor heard. now, the halal industry has a story for Islamic finance that is familiar to them, access to compliant capital with asset-backed (Ijara) Sukuk. Thus, the halal industry needs to get in the face of Islamic finance to talk the talk of a uSD2 trillion ‘niche’ market in the making! Start with halal as an investment class and finance its growth via Sukuk!

*about the author: rushdi Siddiqui is the Global head of Islamic Finance and oIC Countries at Thomson reuters (Tr) where he works closely with Islamic finance and banking professionals, including Shariah scholars, fund managers, treasury, financial hubs, regulators, stock exchanges, central banks, Takaful (insurance) entities, halal industry, and intra-oIC (57 Muslim countries). recently, rushdi led the Islamic finance team at Thomson reuters in the successful global launch of the Islamic Finance (IF) Gateway -- the world’s first platform that addresses the work flow in IF across multiple asset classes. opinions expressed by contributing writers do not necessarily reflect the views of The halal Journal.

The halal Journal | April-June 2011 |

3/26/11 11:17:39 AM

Knowledge MAnAgeMenT in The world of hAlAl

Words by Fe Jazzareen Mor Japar Khan

it has been interesting to witness how the halal industry has progressed over the past few years.

There has clearly been a lot of activities as companies and organisations strategise to position themselves in this

new marketplace. no matter what the position is, the basic economic activities remain – production,

Responses include participating in the Halal industry is either risky, confusing or they simply don’t know what to expect.

consumption and exchange.

The difference is in the guiding principle, as halal is a religious requirement.

his new economy stems from the core of a slightly differing perspective – a value-based economy in which all mechanisms within – along with legislation, policies and systems - represents what is permissible by Shariah. During these years, there have been companies that have embraced, participated and successfully carved their own niche, while some on the contrary prefer to remain spectators, adopting a “wait-and-see” stance. Through dialogues, we have established varying reasons why some companies tend to shy away from seizing this opportunity. responses include participating in the halal industry is either risky, confusing or they simply don’t know what to expect. From a professional perspective, no matter what points are given, they are valid. This is how prospective industry players feel, and although some might argue that this is just perception, fact remains that it is real for them. It is not anyone’s position to judge if they are wrong or right, after all participation in the halal industry must be made based on sound business decision – a decision based on having products or services which matches with the market needs and is consistent with the value requirement expected from the claim of halal. Is it not surprising for companies to not yet be ready to participate in this new playing field – through all the uncertainties and complexities; is it worth the business risk? The halal Journal | April-June 2011 |

Feature.indd 52

www.halaljournal.com

3/26/11 9:43:37 AM

In order to manage this complexIty, corporations need to ensure that competency and capability is developed so that coordination and integration of requirements become part of existing processes and systems

he halal economy involves the convergence of multiple areas of knowledge. Knowledge remains a key contributor towards economic growth, especially more so in emerging markets as it is the foundation for the development of innovation and technology. when discussing on halal, it is easy to become intimidated, more so when the issue of religious standpoint come into debate. Issues within halal are complex and some will require time to be refined. This should be left in due course and respect for the legislative process. although some issues have its effect on product/ service marketability, not all are industry-relevant. This is where the management of knowledge becomes essential. Knowledge management within the halal industry is exciting yet extremely challenging. This is because complying with halal requirements involves integration as a process rather than a function. The same principle applies in operations and business processes alike. as an example, in manufacturing operations, halal is not simply a control point at procurement level. Similarly in business, assigning halal as a brand function is severely insufficient. In order to manage this complexity, corporations need to ensure that competency and capability is developed so that coordination and integration of requirements become part of existing processes and systems. many corporations prefer knowledge to be managed internally; however the process of knowledge creation begins with knowledge acquisition. It is important for industry players to acquire the ability to distinguish issues relevant to their specific offering. more importantly is the ability to source for information, sufficient enough to be able to make an informed decision, better yet â&#x20AC;&#x201C; develop competitive advantage.

This is where, it must be instilled that human capital and knowledge enhancement remain as the allimporTanT nucleus, as a sophisticated system is no replacement for human interpretation and a good sense of judgement.

he halal industry is seeing various initiatives to capture and make available increasing amounts of news and information by creating knowledge centre repositories using information technology. Publicly available, organisations can refer to specific database to bridge existing information gap and keep up-to-date with industry progress. however, information by itself is meaningless, unless one is able to process, convert and use that information to gain advantage or insight into something more meaningful. This is where, it must be instilled that human capital and knowledge enhancement remain as the all-important nucleus, as a sophisticated system is no replacement for human interpretation and a good sense of judgement. Industry leadership will remain with those capable of using these varying levels of information and formulate specific solutions to gain competitive advantage. Knowledge management in halal as a subject matter will in due time take shape and become an integral component within the architecture of the halal industry. This will again be interesting to witness as more companies discover its tipping point and make their entry into this industry.

*about the author: Fe Jazzareen is currently the Principal Consultant for KasehDia research & Consultancy.

www.halaljournal.com

Feature.indd 53

The halal Journal | April-June 2011 |

3/28/11 2:02:58 PM

Islamic Business Contracts and Microfinance: a case of Mudharaba

Words by Azhar Nadeem

microfinance is defined to be “providing small loans to the poor people who are traditionally excluded from the financial system”. microfinance is a powerful tool to fight poverty. microfinance means building financial systems that serve the poor and help them raise income, build their assets, and cushion themselves against external shocks. microfinance will reach its full potential only if it is integrated into a country’s mainstream financial system. according to a cGaP survey, almost 72 per cent of people in muslim countries do not use the formal financial services because financial system is interest-based which is prohibited in Islam (Karim, Tarazi and reille, 2008).

he Islamic world is enormous, with approximately 1.8 billion people across different countries. Poverty is rampant and widespread across the Islamic world. access to finance is very low based on their religious beliefs. This is a huge population under poverty and needs immediate and significant consideration to achieve the goal of making poverty history by 2015 as pledged in the millennium development goals. These poor muslim micro entrepreneurs need and demand access to financial services which do not compromise their religious beliefs of interest prohibition. Their demand can be met by designing financial products which are compatible with the norms of Islamic finance. Guiding principles of Islamic finance are prohibition of interest, avoidance from Gharar, halal or permissible use of funds and non-exploitation. The Islamic alternative to interest-based conventional loan is partnership-based, trade-based or lease-based credit that permits the ownership and/ or use of commodities or physical assets needed for productive enterprise. Partnership-based modes work on profit and loss sharing and include mudharaba, musharakah and diminishing musharakah. lease-based modes allow ownership/ use of funds on deferred payment basis. There are several such products developed by mainstream Islamic financial institutions involving Murabahah, bai-muajjal, ijara, bai-salam, bai-istisna, bai-istijrar, and so on. This article is focused on one product only – mudharaba. What is Mudharaba? mudharaba is an arabic word which means a business (project) in which capital is provided by one party (a company or an individual) while effort and skill are contributed by the other party (beneficiary, entrepreneur or borrower). mudharaba is a kind of partnership where one partner provides financial capital or (capital) to the other for investing it in a commercial enterprise. owner of financial capital is called “rabb-ul-mal”, and the partner with the entrepreneurial skills is called “mudharib”. work and management is the sole responsibility of mudharib and “rabb-ulmal” or capital owner is asleeping partner. The halal Journal | April-June 2011 |

Feature.indd 54

capital owner has a choice to impose a restriction on “mudharib” about the nature of business for investment. If he imposes a restriction on “mudharib”, this will be called as “restricted mudharaba”, otherwise it will be “unrestricted mudharaba”. capital owner can engage more than one person as “mudharib” but for the sake of simplicity, we will consider the two parties “mudharaba”. mudharaba is subject to basic principles of Islamic Business contracts. Distribution of the Profit Mudharaba It is necessary for the validity of mudharaba that profitsharing ratio is agreed between the parties; right at the beginning of the contract, profit-sharing has to be in proportionate terms and a “lump sum” amount cannot be allocated either to capital owner (rabb-ulmal) or to the mudharib. Profit-sharing ratios may take many variations under different situation. Share in expected profit is the reward for both parties. The mudharib can claim any compensation as salary for the work he has done. however, he can claim logical business expenses on actual basis subject to certain conditions. If the mudharib has undertaken more than one business initiative and has incurred loss in some transactions, and has gained profit in some others, the profit shall be used to offset the loss at the first instance, and then the remainder, if any, shall be distributed between the parties according to the agreed ratio. In case of overall loss, the rabb-ul-mal will lose his capital and the mudharib will lose his potential reward from profit. neither party can claim financial compensation in case of loss. Termination of Mudharaba The contract of mudharaba can be terminated at any time by either of the two parties. The only condition is to give a notice to the other party. however, to avoid adverse effects for both parties, they can specify the conditions which may lead to termination of mudharaba while entering into the contract. Mudharaba Model under a mudharaba contract, the bank provides the capital needed for a micro enterprise while the micro www.halaljournal.com

3/26/11 9:44:52 AM

Microfinance is a powerful tool to fight poverty. Microfinance means building financial systems that serve the poor and help them raise income, build their assets, and cushion themselves against external shocks.

Assumptions of the Model

entrepreneur offers labour and expertise. The profits (or losses) from such financing are shared between the bank and the entrepreneur at a fixed ratio. Financial losses are assumed entirely by the microfinance programme; the liability of micro entrepreneurs is limited to their time and effort. The contract between the microfinance programme and the entrepreneur is known as restricted mudharaba because the microfinance programme agrees to finance specific business activities by micro entrepreneurs and to share relative profits according to an agreed percentage. To engage in mudharaba transactions, a bank must meet the following legal obligations: • Details of the parties to the contract, description of the objects, nature of business to be undertaken, period of contract and all other relevant details including any limitations and restrictions should be clearly documented. contracting partners should ensure that the terms and conditions of contracts are clear, concise and unambiguous, and are not intentionally misleading in any way which would confuse an investment account holder or result in his entering into a relationship of which impact he does not appreciate. • The Microfinance programme should bear the entire financial risk and should not demand collateral to reduce it. • Profit-sharing ratios must be determined and agreed before execution of mudharaba. These sharing ratios can only be a percentage of the profit. Fixing a lump sum amount is not allowed. • It is the right of the micro entrepreneur to have full control over the business management while effective supervision is the right of the microfinance programme. www.halaljournal.com

Feature.indd 55

Since Muslims participating in Islamic Microfinance programmes are devout Muslims and they do not indulge in cheating, deceit, fraud and other malicious activities, they refrain away from riba (usury) as well as all other acts which can spoil their halal earnings; keeping in mind the sayings of the Prophet Muhammad (p.b.u.h.): “Whoever bears arms against us is not one of us, and whoever cheats us is not one of us.” (Saheeh Muslim) It is assumed that the business activity being financed by Mudharaba gives a fixed profit per month. This is not an oversimplified assumption; we may certain business which give fixed profit over a certain period of time e.g. an ice cream vendor who sells branded ice creams will get almost fixed profits due to the price tags on the products. Being a famous brand everybody knows the price. In this case, profits are relatively easy to calculate. loan officers of Islamic Microfinance programmes are competent and trained enough to carefully select the product type and successfully execute.

02 03

or example, a person in Pakistan approaches the Islamic Microfinance programme with his request of financing. a loan officer from the programme will check the qualifying criterion and if qualified will ask about his/ her business activities. By interviewing the client, the loan officer assesses the suitable product. If the business nature of the customer is such that it is possible to calculate the profits easily, he will adopt mudharaba as the right product to be offered to the client. Suppose that the prospective mudharib is a grocery store owner and he wants to add a cold drink corner to his existing business where he will be selling cold drinks of a famous brand like Coca Cola or Pepsi; since these are famous brands, sale and purchase prices are known and profits can be calculated. It is assumed that prices and profit margins do not change over the span of mudharaba so that assumption of fixed profit remains true. Famous cold drink brands provide sellers with deep freezers to chill their products at no cost; and electricity charges are to be paid by the seller. It is assumed that the prospective mudharib is able to calculate the electricity cost of the deep freezer. Such an The halal Journal | April-June 2011 |

3/26/11 9:47:59 AM

understanding of cost is necessary as he will not be selling cold drinks alone but a variety of other items as well. upon getting all the necessary details and successful completion of required verifications, Islamic microfinance programme approves his application and enters into a mudharaba agreement with him on the following terms and conditions: •• Contribution of Islamic Microfinance programme will be rs.10,000 and the mudharib will contribute through his labour. •• Profit-sharing ratio is 20:80 i.e. The share of Islamic Microfinance programme will be 20 per cent while that of the micro enterprise or Mudharib is 80 per cent. •• Tenure of Mudharaba will be one year. •• The Microfinance programme cannot remain a partner for indefinite periods. For successful completion of mudharaba, the mudharib or micro enterprise will purchase the capital invested by the microfinance programme over the period of mudharaba. For the sake of simplicity, it is assumed that invested capital is divided into 12 equal shares and the Mudharib will buy one share on a monthly basis. Profits will also be shared on a monthly basis. In this case, the Mudharib will buy a share worth Rs.833.33 on a monthly basis or 8.33 per cent of total share.

ow, the amount is disbursed to the mudharib for onward investment in cold drinks business. according to our assumption of fixed profit, micro enterprise earns a profit of Rs.2,000 until the end of the first month. During the first month, the microfinance programme is 100 per cent owner of capital, so it will receive Rs.400 as profit-share while the profit-share of the micro enterprise or Mudharib will be rs.1,400. as per agreement, the micro enterprise will buy a share from the invested capital worth Rs.833.33. Total

payment by the mudharib to the programme will be: Profit-share of Microfinance programme + Price of one share from capital = Total Monthly Payment Rs.400 (20% of 2,000) + 833.33 (price of share) = Rs. 1,233.33 The second month will start in a way that the Microfinance programme has sold one share from its total ownership of capital. now the microfinance programme owns 91.67 per cent of the total capital and will be entitled to profit-share according to its capital ownership. Share of capital sold to the mudharib belongs to him, and he has the right over 100 per cent of the profit generated by this unit or share. now suppose that the micro enterprise earns a profit of Rs.2,000 during second month as well, 91.67 per cent of total profit or Rs.1,833.4 will be shared according to profit-sharing ratio. Total payment by mudharib at the end of the second month will be: Profit-share of Microfinance programme + Price of one share from capital = Total Monthly Payment Rs. 366.68 (20% 1,833.4) + Rs. 833.33 (price of share) = Rs.1,200 It can be noted that the mudharib or micro enterprise has to make a payment less than what he paid at the end of the first month. now, the third month will start in a way that the share of the microfinance programme has reduced further. at the start of the third month, the microfinance programme owns 83.33 per cent and its profit share will be less accordingly. The micro enterprise will have to make even lesser payment at the end of the third month. Similarly, ownership and profit share of micro enterprise will rise in subsequent month, while for the microfinance

Table 1: Sample repaymenT Schedule

Islamic financial services have a good degree of compatibility with microfinance. If promoted and developed properly, Islamic Microfinance can have a big impact on overall poverty and economic development of many countries. The halal Journal | April-June 2011 |

Feature.indd 56

(A) Month

(B) Capital ownership of MFP at start Month (%)

(D) Percentage of profit to be shared (%)

(E) Total Profit

(F) Share of MFP (20%) (F) = D × 20% (E)

(G) Price of Share

(H) Total Payment

1 2 3 4 5 6 7 8 9 10 11 12 13

100 91.67 83.33 75.01 66.68 58.35 50.02 41.69 33.36 25.03 16.7 8.37 0

0 8.33 16.66 24.99 33.32 41.65 49.98 58.31 66.64 74.97 83.30 91.63 100

100 91.67 83.33 75.01 66.68 58.35 50.02 41.69 33.36 25.03 16.7 8.37 0

2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000 2000

400 366.68 333.36 300.04 266.72 233.4 200.08 166.76 133.44v 100.12 66.8 33.48 0

833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.33 833.37 0

1233.33 1200.01 1166.65 1133.37 1100.05 1066.73 1033.41 1000.09 966.77 933.45 900.13 866.81 0

10,000

12600

Total Note: Row No.13 is for illustration purposes only

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WINNERS OF THE HALAL JOURNAL AWARDS 2010, 2009, 2008, 2007 and 2006 THE HALAL JOURNAL AWARDS 2010 • Best Product: SimplySiti Sdn Bhd, Malaysia • Best Islamic Financial Service or Product: FORAS International Investment Company, Saudi Arabia • Best Community & Environmental Development: Colgate-Palmolive (Malaysia) Sdn Bhd, Malaysia • Travel & Hospitality: Cresentrating Pte Ltd, Singapore • Best Service Provider: Al-Jazeera English • Best Innovation: ImHalal.com, the Netherlands • Outstanding Personal Achievement: Dr. Naif Al-Mutawa, Kuwait THE HALAL JOURNAL AWARDS 2009 • Best Halal Product: AYS Sdn Bhd, Malaysia • Most Creative Marketing Campaign: Saaf International, United Kingdom • Best Islamic Financial Service or Product: Khazanah Nasional Berhad, Malaysia • Best Corporate Social Responsibility Project: Chemical Company of Malaysia (CCM) Bhd, Malaysia • Travel & Hospitality: Al Jawhara, United Arab Emirates • Best Halal Related Service Provider: Astro Oasis, Malaysia • Outstanding Personal Achievement in the Halal Industry: Dr. Hani Mansour Al-Mazeedi, Kuwait THE HALAL JOURNAL AWARDS 2008 • Best Halal Product: Nitta Casings Inc., USA • Best Creative Marketing Campaign: Marhaba Halal Food B.V, the Netherlands • Best Islamic Financial Service or Product: Kuwait Finance House (Malaysia) Berhad (KFHMB) • Best Corporate Social Responsibility: Carrefour Malaysia • Travel & Hospitality: Zabihah.com, USA • Best Halal Related Service Provider: CIMB Private Equity and Venture Capital Malaysia • Best Innovation in the Halal Industry: - Darabif Meat Company, Malaysia - Comgroup Prima, Malaysia • Outstanding Personal Achievement in the Halal Industry: Dr Habib M’Nasria, Quality Assurance of McDonald’s Middle East THE HALAL JOURNAL AWARDS 2007 • Best Halal Product: Crescent Foods Inc., USA • Best Creative Marketing Campaign: Maple Lodge Farms, Canada • Best Islamic Financial Service or Product: International Centre for Education in Islamic Finance (INCEIF), Malaysia • Best Corporate Social Responsibility: Nestle (Malaysia) Berhad • Travel & Hospitality: Tabung Haji Travel & Services Sdn Bhd, Malaysia • Best Halal Related Service Provider: - The Islamic Food & Nutrition Council of America (IFANCA), USA - MISC Integrated Logistics Sdn Bhd, Malaysia • Best Innovation in the Halal Industry: Novel Molecular Kit for the Detection of Slaughtered or Killed Meat by Associate Professor Dr. Adl-El Aziem Farouk Gad, IIUM, Malaysia • Outstanding Personal Achievement in the Halal Industry: Dato’ Hj. Mustafa Abdul Rahman, Director General of JAKIM (2007), Malaysia THE HALAL JOURNAL AWARDS 2006 • Best Halal Product: Midamar Corporation, USA • Best Creative Marketing Campaign: Al Islami Foods, Dubai • Best Islamic Financial Service or Product: Microlink Systems Sdn Bhd, Malaysia • Best Corporate Social Responsibility: Johor Corporation, Malaysia • Travel & Hospitality: LSG Skychefs-Brahim’s, Malaysia • Best Halal Related Service Provider: Malaysia International Halal Showcase (MIHAS) • Best Innovation in the Halal Industry: Halal Science Centre, Chulalongkorn University, Thailand • Outstanding Personal Achievement in the Halal Industry: Dato’ Jamaluddin Abdul Kadir, Founder and CEO of Prima Agri-Products Sdn Bhd, Malaysia

Congratulations!

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programme, both will recede over time. at the end of the twelfth month, equity share of the microfinance programme will be zero and mudharaba will conclude. we can summarise a sample repayment schedule in a tabulated manner for better understanding (see Table 1). compared to conventional microfinance programmes which adopt an easy methodology of repayments in equal monthly instalments, this is rather complex to understand and manage. Such a programme has many built-in challenges which can be summarised as follows: {i} Uncertainty of profits In the previous example, we have assumed that profits will remain fixed over time. This looks like a very oversimplified situation. Even in a situation where it is possible to calculate profits on the basis of sales and purchase, it will be much more difficult to calculate the exact profit. This is because sales always fluctuate depending on different circumstances. In this case, the micro entrepreneur can be trained to obtain bills from his vendor and keep track of daily sales on a simple format. Since the product is being purchased from a vendor of repute, risk of counterfeit bills or over invoicing is minimised. Situations can be more difficult where sales and purchase prices are unauthentic. however, investing in authentic brand names may be a good starting point for Islamic microfinance programmes. {ii} Uncertainty of payment amoUnts The second difficulty with this model is that the borrower has to repay a different amount each period (and the loan officer has to collect a different amount each period). This makes it slightly difficult compared to EmI arrangements. The margin for error is high in these situations. however, this can be managed to some extent by rigorous training to loan officers. once they have grasped the idea and the logic behind such calculations, then it will get relatively easy. loan officers usually have the ability to do mathematics and calculations. under conventional microfinance programmes, loan officers have to perform calculation in case of bullet loans. It is often argued that micro entrepreneurs do not keep accounts. This is partially true as they do keep their accounts although in a very informal manner. They always maintain a record of their credit sales to the households, their sales and purchases. They always do calculate profits and returns of their investments. This shows that they have calculation skills and they need to be trained to change their way of book keeping in a way that can serve the purpose of microfinance programmes as well. application of such a model may be less hectic and more straightforward in other forms of trade like livestock fattening where calculations will be easier.

icro enterprises have roles to play in economic development of poor countries. a world Bank study pointed out the advantages of micro enterprises as increasing the aggregate output, enabling the efficient use of capital and labour, initiating indigenous enterprise and management skills, bringing a The halal Journal | April-June 2011 |

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regional balance, and improving the distribution of income. micro enterprises can significantly generate economic activities, employment, and demand, and can contribute significantly to the economic development. access to financial resources is very important for economic development. access to financial services remains low all over the muslim world partly due to religious beliefs. This gave rise to the evolution of Islamic banking to serve the muslim population without violating their religious beliefs. This new industry received good response and has witnessed enormous growth since its inception. although development of Islamic finance has improved access to finance to some extent, micro entrepreneurs remain largely excluded from financial services because they lack collateral and are unable to fulfil certain requirements to gain access to finance. conventional microfinance played an important role in providing financial services to poor entrepreneurs on collateralfree basis. Islamic microfinance needs to be developed in the same manner to help muslim micro entrepreneurs. Islamic finance must be seen in a much broader sense. It promotes risk-sharing, entrepreneurship, materiality, and non-exploitation. Islam prohibits being involved in activities which are harmful to the society as a whole. Islamic financial services have a good degree of compatibility with microfinance. If promoted and developed properly, Islamic microfinance can have a big impact on overall poverty and economic development of many countries. Islamic law allows room for financial innovation, and several Islamic contractual arrangements can be combined to design new products. Islamic microfinance is capable to adopt microfinance best practices without compromising on Shariah compliance. Islamic microfinance needs patronage especially by Islamic financial institutions that have developed over time and it will bear fruit and will contribute significantly towards poverty reduction. This will be a significant step towards the millennium development goals.

references: 1. Karim, n., M. Tarazi and X. reille (2008) “Islamic Microfinance: an emerging Market niche.” Focus note 49. Washington D.C: CGaP. august. 2. SBP Guidelines for Islamic Microfinance Business for Financial Institutions. State Bank of Pakistan Islamic Banking Department. http://www.sbp.org.pk/ibd/2007/annex-c5.pdf 3. Gloud Blake: Islamic Microfinance Institute of halal Investing http://investhalal.org 4. al-ZamZami, Grace, l., “Islamic Banking Principles applied to Microfinance. Case Study: hodeidah Microfinance Programme, Yemen”, unCDF, http://www.uncdf.org/ english/microfinance/reports/thematic_papers/islamic_ba nking/main_text.html 5. akhter Waheed (2009): Islamic Microfinance and poverty alleviation: a CaSe oF PaKISTan Proceedings 2nd CBrC, lahore, Pakistan. november 14, 2009. 6. obaidullah, Mohammed, Khan Tariqullah (2008): Islamic Microfinance development – Challenges and initiatives. IrTI Policy dialogue paper no.2, Jeddah. 7. obaidullah, Mohammed (2008): role of Microfinance in Poverty alleviation. IrTI, Jeddah. 8. Chiara Segrado (2005): Islamic microfinance and socially responsible investments: a case study. 9. Dhumale r., Sapcanin a.: “an application of Islamic Banking Principles to Microfinance” Technical note, a study by the regional Bureau for arab States, unDP, in cooperation with the Mena region, World Bank. 10. Ferro n. (2005): “Value Trough Diversity: Microfinance and Islamic Finance and Global Banking”. Fondazione enrico Mattei, Milan, Italy, June 2005. 11. range M. (2004): “Islamic Microfinance”, rWTh aachen university, research Center of “International technical and economical Cooperation” Faculty of Business administration, a thesis under directions of Prof. Dr. W. Gocht, 2004. 12. usmani, M. Taqi: an Introduction to Islamic Finance. Karachi, Pakistan: Idaratul Ma’arif Karachi, 1998. 13. Khan, ajaz ahmed and Phillips Isabel (2010): Influence of Faith on Islamic Microfinance programs. Islamic relief worldwide. www.islamic-relief.com 14. rehman, aamir (2008): “Towards Islamic Microfinance: a Primer.” http:// www.microfinancegateway.org/content/article/detail/41129 15. hasanuzzaman, S.M. 1994: “What Is Mudharaba?” Journal of Islamic Banking and Finance **about the author: azhar nadeem is a microfinance practitioner and is currently associated with a leading microfinance institution in Pakistan. opinions expressed by contributing writers do not necessarily reflect the views of The halal Journal.

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Conversations

Balancing Quality & Profitability DINDINGS POULTRY PROCESSING Sdn Bhd, a subsidiary of Malayan Flour Mills Berhad, is renowned as one of the major sources of poultry produce in Malaysia under the brand names of Ayam Dindings and Ayam Fiesta. Its flagship product, Ayam Dindings is also exported, notably to predominantly Muslim countries like Brunei Darussalam. Dindings started operations in 1990, the first fully automated poultry processing plant in Malaysia then located in Sitiawan, Perak with the capacity to process 70,000 birds per day. Launched by former Prime Minister, Tun Dr. Mahathir, the fully-equipped modern plant is specially designed and constructed along USDA Guidelines to produce export quality products. In this interview, Dindings’ General Manager, Tony Wo Kah Keat, shares the company’s mission, vision and experience when it comes to producing high-quality Halal poultry products.

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THJ: Judging from the increasing demand for Halal certified goods, how does this impact the sales of Dindings’ products? I think that halal is an ongoing trend and the demand is increasing. Dindings and the entire mFm Group have been committed to producing halal products since day one. So the increase in the demand for halal food is definitely beneficial for Dindings. But the awareness of halal in malaysia is not that strong compared to some countries. The local consumer is not willing to pay a premium for halal. To attain halal certification, you need to have good process, quality control, certified slaughtering, all these things. So the only set back now, is that the customer is not willing to pay a premium for halal because they don’t know the process required behind halal. I think it may take a few years to achieve the same level of understanding like some other countries, especially in the middle East. THJ: What factors affect the cost of production and how do you balance out to provide your customers reasonably priced products without compromising the requirements of Halal and other quality standards? one of the costs of producing a chicken is the cost of the live day-old-chick itself. The other costs are the cost of the feeds and farm costs. The main cost of the feeds is the cost of the corn and soybean meal, which are the two main ingredients. The cost is affected by the corn and soybean commodities in the market. So it’s very much a market-driven cost. we import fresh corn and soybean meal from argentina, Brazil and the uS. when the chickens are fed fresh feeds, they grow better, faster and are less prone to disease. This helps in lowering our cost. another factor is labour. we’re a labour intensive industry and labour costs are one of the main costs for us. It’s getting harder to recruit people, so we’re banking on efficiency, which helps reduce costs. Training is important. we try to improve our production efficiency. If the process is efficient then our costs will be lower. But no matter what the costs are, our commitment to halal is 100 per cent. THJ: How does Dindings ensure its products are different from other processed food products? as I have mentioned, better feeds means better chicken in terms of meat and other things. we are also involved in a lot of r&D work and innovations. we just came up with fully cooked satay, which is very convenient, sold at a competitive price. we would like to expand our products beyond traditional products like frankfurter and nuggets. THJ: What are the challenges faced by the company in penetrating the local and international market and how are they resolved? For the local market, the level of perception of halal meat is not that strong yet. They still think that the wet market is the only source of fresh meat. This is one of the biggest challenges we face – to educate the end consumer. There’s also a lot of stiff competition in the market in terms of price. once suppliers have the chicken, they have to clear it fast. This makes the price volatile. For the international market, ever since the bird flu a few years back, malaysia has been banned by japan and a few other countries. But Dindings still exports to Brunei and we’re currently looking to export to the middle

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We try to improve our production efficiency. If the process is efficient then our costs will be lower. But no matter what the costs are, our commitment to Halal is 100 per cent.

Tony Wo Kah Keat Dindings’ General Manager

East. we’re in discussions with interested parties about the possibility of exporting through them. The middle East started being interested in us because malaysia did quite well in promoting the halal status. So the middle East will be more comfortable in importing meat from malaysia, because it’s a muslim-majority region and they know that jaKIm (Department of Islamic Development malaysia) is strict as well. once you’re certified by jaKIm, then you’re fully halal, no doubt about it. THJ: Are you planning to export into more countries? we definitely won’t restrict ourselves to malaysia only, but malaysia remains our base. we still look at the malaysian market first and cater to the demand here. There’s no point if we export and then the local market has to import due to a shortage of supply here, especially if we can’t ensure if the meat from overseas is halal. we are also looking at expanding our capacity to cater to demand. The consumption of chicken in malaysia is very high. It’s about 37 to 38 kg per person per year, one of the highest in asia. In Vietnam, by comparison, total meat consumption is only about 27 www.halaljournal.com

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kg, with chicken meat making less than 10 kg. In South Korea, it’s almost 40 kg. chicken is one of the cheapest protein source, compared to beef and mutton. THJ: What are your thoughts on the rising trend of targeted marketing and branding for Muslims (Islamic branding, i.e. shampoo ads targeting Muslim audience with women in ‘tudung’ modelling) when it comes to products and services? What is Dindings’ position on this? I think it’s a good trend. when more people are involved in halal products and services, it’s good for the market and also creates awareness of the importance of halal. It’s a very strong trend and the younger generation now is more aware of the importance of halal food, products and services. we totally support it and we want to be a part of it. we are fully committed to our customers when it comes to halal. when they consume Dindings products they can be rest assured and confident that it is halal.

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FAST TRACK

FAST TRACK what’s new + review

Halal Laboratory in the Philippines now in operation The Ministry/ Department of Science and Technology, Regional Office No. XII (DOST XII), newly established a world-class Halal Laboratory. Equipped with advanced technology or state-of-theart equipment and facilities, the laboratory is located at the DOST XII building in Cotabato City, Philippines, and is now in operation. This is the first and only Halal Laboratory in the country, devoted to serving local and international clients encompassing the entire Halal food and selected non-food supply chain through the provision of Halal laboratory services. The laboratory was established in line with the ‘Philippines Science and The Halal Journal | April-June 2011 |

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Technology Program for the Development of the Halal Industry’, primarily through the initiative and effort of Dr. Haja Sittie Shayma (Zenaida) P. HR Laidan, DOST XII Regional Director. According to Dr. Laidan, DOST, as competent authority with DOST XII Halal Laboratory, will validate compliance of products and services to Halal requirements in terms of technical aspect in partnership with the National Commission on Muslim Filipinos (NCMF), Philippines, as the Islamic competent authority to validate compliance of products and services in terms of the religious requirements. Dr. Laidan affirmed that the construction of another 62

and bigger Halal laboratory in South Central Mindanao has started to cater to the increasing demand of Halal products and the flourishing Halal industry. She added that it shall be named “Philippines National Halal Laboratory” upon completion and will serve as the clearing house for all Halal products coming in and out of the country. “We cannot guarantee that a particular Halal-certified product is genuinely Halal without being tested in our Halal laboratory”, she added. She emphasised that the Halal Laboratory is indeed essential, especially for a non-Muslim country like the Philippines, to maintain the integrity of its local Halal products and credibility

of certifying bodies and producers/ manufacturers/ processors of local Halal products both for domestic consumption and export trading for the protection of the Philippines Halal market and the Muslim Ummah worldwide. The Philippines DOST XII Halal Laboratory is supported by its Microbiological and PhysicoChemical Laboratories, which are all accredited with ISO/ IEC 17025 – the highest international standard of laboratory accreditation – and managed by DOST XII certified with Quality Management System ISO 9001:2008.

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FAST TRACK

Philippines

Consultations on Halal food standards underway The Department of Agriculture is doubling its efforts to finalize the country’s Halal food standards to boost the competitiveness of Philippine agriculture and fisheries products in the Halal world market, currently estimated at US$2.3 trillion. Agriculture Secretary Proceso Alcala said that entering this huge lucrative market would considerably contribute in increasing Philippine food exports, and subsequently revitalize agri-fishery and agribusiness enterprises that will greatly benefit Filipino farmers and fisherfolk. “Further, this will pave the way to the establishment of more world-class Halal food

production and processing enterprises that will create needed employment opportunities to thousands of our countrymen”, Alcala added. The head of the Department of Agriculture’s Halal Food Industry Development Committee (HFIDC), BFAR 12 Regional Director Sani D. Macabalang, has been executing a series of consultations with stakeholders nationwide so they could share in refining the proposed draft standards. The first leg was held January 24, 2011 at the Bureau of Plant Industry satellite office in Quezon City, where the HFIDC presented to Halal industry

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stakeholders three draft standards, namely: ‘Halal Agriculture and Fishery Products,’ ‘Code of Halal Slaughtering Practices for Poultry’ and the ‘Code of Halal Slaughtering Practices for Large Ruminants.’ It was attended by about 50 Muslim scholars from Metro Manila and suburbs, and officials and representatives from the National Commission on Muslim Filipinos (NCMF), partner agencies, and the private sector. Three other consultations will be conducted in General Santos (February 16, 2011), Zamboanga City and Cebu City, both in March. According to Macabalang, the three proposed standards include specific provisions for each food product group, and address issues on Genetically Modified Organisms (GMOs). “The standards took into account the requirements

set by regional and international bodies to ensure harmonization of the various provisions which are important in the recognition of the country’s Halal export,” Macabalang said. When finalized, the three Philippine Halal code of standards will be presented to the ASEAN Technical Working Group on Halal Food and the World Halal Forum which will be held in April 2011 in Malaysia. Macabalang said that once the Philippine Halal standards are approved and recognized by these bodies, the country could then easily gain access to the world Halal market. According to Macabalang, the National Commission on Muslim Filipinos (NCMF) is tasked to accredit Halalcertifying entities in partnership with the DA and other government agencies, the private sector, and institutions,

Golden Sweet Metro Expand Co. is fortunate to offer Date Liquid Sugar that is a mixture of fructose and glucose within Malaysia. This product can be replaced by white sugar (Sucrose) in most cases Sucrose contains 12 carbon atoms and its use in detrimental whereas fructose contains 6 carbon atoms and consumption of this type of sugar was harmless, also it has a huge benefit at the same time. The sugar which derived from dates is totally harmless because the dates are produced organically in Iran groves and we’re claiming that we offer organic and healthy products. Our product was used in beverages, syrups, sweets, jams, cookies and ice cream and as an add-in was used in production of milk, yogurt and cream as sweetener.

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FAST TRACK as stipulated in art 2(h) of ra 9997 s. 2009. The commission is also tasked to promulgate the implementing rules and regulations of ra 9997, particularly the accreditation of certifying bodies. Previously, the actual observations made by local and foreign participants of the International halál Poultry Standards Training workshop in cagayan de oro city last oct. 5-6, this year following their plant visit to a local poultry processing plant had put the country in bad light. halal protocols as taught in the training were not seen in the plant which manufactures so-called “halál” poultry chicken. “we cannot remain passive and unperturbed by the current malpractices of certain “halál-certified” local processing plants”, macabalang said.

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Pakistan’s Bill of Halal Certification To give a better exposure to Pakistan’s exports by fulfilling the requirements of consumers of the trillion dollar halal products and services sector, comprising of one fourth of the world’s population, the Pakistan government is drafting a bill called “Bill of halal certification.” The bill is being prepared by the Trade Development authority of Pakistan (TDaP) in consultation with all stakeholders. asad Sajjad, Secretary-General and cEo of Pakistan’s newly formed halal Development council (hDc) said that once the bill is ready, it will be tabled before the national assembly to be made a law. The newly formed

halal Development council is a nongovernment organisation (nGo) committed to the development of Pakistan’s halal economy. asad said, “Pakistan has great potential to become the halal hub of the region due to its geoeconomic position. It has direct access to millions of halal consumers in afghanistan, the middle East, and central asia.” The first Global halal congress held in Karachi in December last year was organised by hDc Pakistan, co-organised by TDaP. The event had more than 28 representatives from international halal certification bodies, prominent figures from 17 different countries as

well as scientists. The first Global halal congress, themed “Discover Pakistan’s halal Potential” introduced the country’s leading halal industry experts, international halal certifiers and halal agenda promoters. asad also said, “Despite being a major muslim country, Pakistan is not known to the world as a supplier of certified halal products and thus its share in this trillion dollar global halal business is negligible”. Earlier this year, Pakistan exported halal meat to malaysia and are now available in 100 stores across malaysia. “hDc [Pakistan] will continue its efforts to create awareness to Pakistan regarding the power of the halal brand and awareness in the world regarding Pakistan’s potential to supply halal certified products and services to the world,” he added.

The halal Journal | April-June 2011 |

3/26/11 9:51:56 AM

Civilisations

Words by Tun Musa Hitam Chairman, WIEF Foundation

Provides Food and Security Answers for an Increasingly Globalised World The World Islamic Economic Forum (WIEF) this year will take place in Kazakhstan from 7 to 9 June, the first time the global forum is being held in the Central Asian region after six years rotating in South Asia, Southeast Asia and the Middle East. “Why Kazakhstan?” some people may ask. My question is: why not? Kazakhstan is one of those undiscovered gems that has the real potential to be one of the game changers not only in the Islamic world but for the entire world. Did you know that Kazakhstan is the ninth largest country in the world with a land mass larger than Western Europe, yet has only a population of 16 million? That 65 per cent of them are Muslims? It has enough arable land to feed half a billion people, has enough proven oil and gas reserves to be the tenth largest oil and gas producing country in the world by 2015. It is also rich in minerals, in particular uranium, of which the country is the world’s leading exporter. International confidence in the Kazakhstan economy has grown. The gross FDI inflow since 1993 till November 2010 was USD122 billion. Sovereign long-term credit rating at the end of 2010 was raised by all three leading agencies (Standard & Poors, Moody’s Investors Service and Fitch Ratings) from BBB to BBB+. With a GDP of USD182 billion and an increase of per capita income from USD600 in 1993 to USD 9,000 in 2010, Kazakhstan has displayed its potential as a shining star in the CIS (Commonwealth of Independent The Halal Journal | Apr-June 2011 |

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States) region. These are just some of the interesting facts that became apparent at the WIEF Foundation when the Kazakhstan delegation first approached us three years ago to host the WIEF there. We finally agreed. We felt Kazakhstan had a bigger role to play, not only in the Muslim world but for all humanity. Kazakhstan is rich enough in resources to provide food and energy security and is in a position to attract investments in these areas. The Greater CIS Region Since 1 January 2010, a unique Customs Union (Kazakhstan, Russia and Belarus) was founded that has created a 170 million strong market with accumulated GDP of more than USD2 trillion.

Kazakhstan’s position at the crossroads of Eurasia with strong links to Russia, and increasingly China, allows it to play a key role in the economic development of Central Asia. With its vast network of rail facilities, the landlocked countries of Central Asia are now able to resurrect the famous Silk Road all the way to Southeast Asia. Food and Energy Security With such a firm foundation, the country has the capacity to fulfil the appetite of an increasingly food and energy-hungry world. Kazakhstan’s capability to provide food and energy security, not only to Central Asia but to other countries in the Asia Pacific region, is emerging. We are already www.halaljournal.com

3/26/11 12:25:20 PM

Civilisations The WIEF

The world can no longer depend on traditional supplies of food and energy and needs to diversify its supply source. As can be observed in recent events such as unrest in the Middle East, fires in Russia and floods in Australia, there is no guarantee that traditional sources of energy and food will last forever.

beginning to see this happening. The enlarging of the KazakhstanChina crude oil pipeline, and the opening of the Turkmenistan-UzbekistanKazakhstan-China gas pipeline have created a stable and secure energy link between the shores of the Caspian Sea to Shanghai and beyond. Kazakhstan, as the breadbasket of the former Soviet Union is now extending its reach into the Asia Pacific region as well. In May 2010, after the ban on grain shipment through China was lifted, 20,000 metric tons of grain was shipped via rail from Kazakhstan through a Chinese port for export to an ASEAN country. Government officials from both countries have signed agreements where www.halaljournal.com

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up to three million metric tons of grain is expected to be shipped in 2011 along this same route. These are just some of the examples of the business co-operation that is on-going between the Muslim and non-Muslim world to address energy and food security issues. The world can no longer depend on traditional supplies of food and energy and needs to diversify its supply source. As can be observed in recent events such as unrest in the Middle East, fires in Russia and floods in Australia, there is no guarantee that traditional sources of energy and food will last forever. Kazakhstan is in a sweet spot to capitalise on the need for an alternative source of energy and food. Whether or not

Since its inaugural forum in Malaysia in 2005, the WIEF has been acknowledged internationally as an important gathering for world leaders and top CEOs, attracting thousands of participants, including SMEs from across the globe. The 7th WIEF, with the theme ‘Globalising Growth: Connect, Compete, Collaborate’, presents an opportunity for entrepreneurs from around the world seeking a gateway into Kazakhstan and the nascent economies of the Commonwealth of Independent States (CIS). Topics to be addressed at the 7th WIEF include: Solutions to Energy and Food Security, Islamic Finance, Infrastructure Development, Halal industry, Alternative energy, and SMEs. The Pre-Forum Programme, showcasing The Businesswomen Forum and the Young Leaders Forum, is highly relevant for human capital development and capacity building. A special feature of the 7th WIEF is the Marketplace of Creative Arts, which aims to bring together some of the best young artists worldwide in music, dance, film, theatre and visual art, showcasing their talent and ideas through performances, art displays and open dialogue in the presence of an international audience. The WIEF continues to make an impact on the global business landscape, facilitating discourse on pressing issues of the day and building bridges of business between nations and communities.

Kazakhstan solves the problems of world food and energy security is dependent on businesses, businessmen and businesswomen. While governments can facilitate the meeting of demand and supply, it is the private sector that will be the main drivers. The WIEF has faith in the business community, their ability to spot each other in a manner of speaking, and say, “Ah! There is money to be made here; if we go there, we can meet certain people. We can close certain deals.” For us, this process is always on cruise mode. Once the business people meet up, we don’t need to push them to make deals or monitor their meetings. The deal will make itself. I am sure they will be doing exactly that during this year’s 7th WIEF in Kazakhstan and at all annual Forums in the

future. I cordially invite the business community to ply your trade and seek business opportunities in one of the most promising regions of the world – Central Asia. Hope to see you in Astana, Kazakhstan from 7- 9 June 2011.

*About the Author: Before becoming Malaysia’s fifth Deputy Prime Minister and Minister of Home Affairs in 1981 – 1986, Tun Musa Hitam held a number of key government posts, including Chairman of Federal Land Development Authority (FELDA), Deputy Minister of Trade & Industry, Minister of Primary Industries and Minister of Education. Tun Musa Hitam is currently Chairman of the World Islamic Economic Forum Foundation and Sime Darby Berhad. He is also a Joint Chairman of MalaysiaChina Business Council; Member of the Advisory Panel of the Iskandar Regional Development Authority, the International Advisory Board of the Port City of Rotterdam and the International Advisory Council of Brookings Doha Center; and Joint-Chairman of the Indonesia-Malaysia Eminent Persons Group. For his services to the nation, he was honoured by Malaysia’s Yang Di Pertuan Agong (King) with the country’s highest award that makes him a “Tun”. He also received the Prix de la Fondation Award from the Crans Montana Forum of Switzerland. Opinions expressed by contributing writers do not necessarily reflect the views of The Halal Journal. The Halal Journal | Apr-June 2011 |

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April-June 2011 Humans need food (meat) for energy. We need energy to fulfil our primary purpose on this planet – worshiping Allah. Why would we want to nourish ourselves with animals that have been mistreated? Is this giving us the right kind of energy with which to worship the Creator of all things? Don’t we want a “blessing in every bite”?

Much ado about the environment and the economy of today “...most of the planet’s destruction is due to overconsumption. Humans have become beings that consume without second thought. Consumption and overconsumption produces pollution; which leads to corruption.”

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Words by Ruzanna Muhammad

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Environmental issues are gaining ever greater prominence in the global political and economic arena. What are the connections between Islam, Halal and the environment? Ruzanna Muhammad conversed with Ibrahim AbdulMatin, author of the groundbreaking book, “Green Deen: What Islam Teaches about Protecting the Planet”, for his perspective on the environment and the economy today. THJ: Can you briefly explain what the Green Deen is all about? Ibrahim: ‘Green’ has become the catchall word for being environmentally-friendly. ‘Deen’ in arabic means religion but can also be translated to path or way. So, a ‘Green Deen’ is literally an environmentally-friendly religion. In my book, I also use Green Deen to mean finding inspiration in one’s faith to become more conscious about humanity’s effects on the planet. Islam is a Green Deen in many ways. First and foremost, Islam recognises that while God is all Powerful, humans can and do impact the Earth. Therefore, Islam provides guidance by way of the Qur’an and the hadith (sayings of the Prophet muhammad, p.b.u.h.) on how to make that impact positive. This is basically what my book is about – what Islam teaches about protecting the planet. THJ: There have been many environment-related campaigns in the past. Why, in your opinion, didn’t they accomplish much? And how important are these type of campaigns, especially now? Ibrahim: actually, I believe there have been many successful environmentally-related campaigns. In my book, I described three main parts to the entire environmental movement. First was conservation – which was about saving the Earth’s natural lands. In the united States, this movement helped create the national parks system. Then there was regulation – which was about limiting the damage we do to the Earth and resulted in several rules and laws and codes like the clean air act. now, there’s the environmental justice movement which is all about recognising The halal Journal | April&June April-June 2011 2011 ||

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that as we pollute the planet, the negative impact disproportionately affects poor people. landfills and bus depots and dirty water and food deserts are most often found in low-income communities. The environmental justice or ‘Ej’ movement is trying to uplift and empower these communities. where I think the movement could have been more effective is by appealing to people’s deeper sense of morality and ethics. I’ve found the movement to be quite secular – lots of facts and figures and data and statements. movements that create a spiritual connection between people and issues, I think, are more successful. THJ: Why do you think an Islamic angle might make a difference compared to mainstream campaigns? Ibrahim: It’s not just the Islamic angle. It’s the faith-based angle. let me explain with a story. In 2008, I went to a conference called “The Dream reborn,” in memphis, Tennessee. This conference was a gathering of environmental justice activists. It was a beautiful group of very dedicated and inspiring people. But I was curious – what was the ordinary resident of memphis thinking? So I ventured into the downtown area away from the conference, and met an old woman at a diner. I asked her, “what do you think of climate change?” She said, “I think it’s something democrats want me

In my book, I also use Green Deen to mean finding inspiration in one’s faith to become more conscious about humanity’s effects on the planet.

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to be afraid of; just like how republicans want me to be afraid of terrorists.” In that moment, I knew that unless environmentalists found a deeper, divine, more spiritual reason for folks to become involved in the movement – they would simply see it as propaganda. I asked this woman, what might convince her that climate change is an important issue. She said, “If the Bible said something about it, I would see it as important.” In fact, all of the world’s major religions teach some level of environmental consciousness. religion is a powerful motivator. we can use religion and its positive, Earth-friendly teachings to inspire people to become protectors of the planet.

Ibrahim abdul-Matin author, Green Deen

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THJ: What, in your opinion, is the fundamental difference in defining man as Khalifah vs. man as consumer? Why is this definition necessary for the consciousness of mankind today? Ibrahim: a Khalifah is someone who is a steward of the Earth. a steward of the Earth is someone who leaves the Earth better than they found it. a consumer is someone who takes from the Earth and destroys its delicate balance. as I discussed in the book, most of the planet’s destruction is due to overconsumption. humans have become beings that consume without second thought. consumption and overconsumption produces pollution; which leads to corruption. The holy Qur’an, ayat 30:41 states, “corruption has appeared on the land and in the sea because of what the hands of humans have wrought. This is in order that we give them a taste of the consequences of their misdeeds that perhaps they will turn to the path of right guidance.” Scholars have interpreted the word corruption here to mean pollution. Islam therefore recognises that humans can have a negative impact on the planet Earth. consumption leads to excess and allah warns us against wasting and living in excess in ayat 7:31, “o children of adam! wear your beautiful apparel at every time and place of prayer; eat and drink; but waste not by excess, for allah loveth not the wasters.” a Khalifah is one who inherits a responsibility to leave the Earth in better condition for the next generation. our beloved Prophet muhammad, peace be upon him, was our Khalifah. he left us better than he found us. So, for us to be Khalifahs of the Earth means to do no harm and to bring benefit to it. If mankind does not function as Khalifah of the Earth, we will continue to be inconsiderate to those who come after us. The Thehalal halalJournal Journal| |April&June April-June 2011 |

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That is to say, we followed in their footsteps of oil consumption rather than thinking about solar and wind power. I say, it’s not too late. Muslim countries, like Malaysia, have opportunities to surpass European and Western countries and become the lead innovators on alternative energy. THJ: Why has the Muslim world been so slow to get involved in environmental issues? Ibrahim: I think colonisation had a big part to play in our slow involvement in the environmental movement. colonised nations have suffered much trauma both in the processes of colonisation and gaining independence. as countries fought for sovereignty, colonisers were rapidly developing their own nations, through their industrial revolutions, using unsustainable practices. as our nations gained independence, there was a feeling or a need to “catch up”. So we copied the industrial practices of our colonisers as opposed to thinking more innovatively and surpassing them as we redeveloped our countries. That is to say, we followed in their footsteps of oil consumption rather than thinking about solar and wind power. I say, it’s not too late. muslim countries, like malaysia, have opportunities to surpass European and western countries and become the lead innovators on alternative energy. THJ: Halal as a market force is growing rapidly globally. Where do you see environmental considerations in the growing Halal economy? Ibrahim: The factory farming industry is an absolutely hideous world that needs to be deconstructed as part of the environmental movement. not only are animals treated with utmost disrespect, but the primary consideration of profits and bottom lines promote unsustainable farming practices that create more pollution than some buildings that use coal fire for electricity! The halal market is bringing the idea of “blessed meat” back into our consciousness. animals are not to be taken for granted. They too are creations of allah, who serve him by serving as our food. They should live decent lives, be treated well, be fed well, and be allowed to graze freely. humans need food (meat) for energy. we need energy to fulfil our primary purpose on this planet – worshiping allah. why would we want to nourish ourselves with animals that have been mistreated? Is this giving us the The halal Journal | April&June April-June 2011 2011 ||

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right kind of energy with which to worship the creator of all things? Don’t we want a “blessing in every bite”? The halal market, by creating an industry where animals live on farms in a clean and beautiful way, reminds us that every creature is sacred and has a sacred purpose. THJ: In the current economic regime, there seems to be an imperative for constant economic growth. How do you reconcile this with the fact that the environment, which supplies the resources needed for economic growth, is indeed finite? Ibrahim: one of the principles of Islam that makes it a Green Deen is that of mIZan or balance. allah has created the Earth in this perfect, delicate balance. Furthermore, allah has created humans to exist in perfect balance on the Earth. I actually believe that allah, the all Powerful, has given us abundance on this Earth. That there are plenty of resources for all of us to live happy, healthy, and full lives for many, many years. The problem is that the current economic system of choice, capitalism, assigns value to human beings based on material things – humans are valued based on what we can produce or consume. This causes us to think in terms of taking, having more than our neighbour, destroying in order to make money, be on top. we really should be thinking about our intrinsic worth which, as Islam defines it, is based solely on our relationship with allah. If we were to abide by this as our value system, we would be much more conscious about how we use the Earth’s resources and its “limitations” would not be an issue. THJ: What are your thoughts on food commodity speculation as a major contributor to food crisis? Ibrahim: Similar to the previous question, this Earth, as part of allah’s abundance, is perfectly equipped to provide all of mankind with plenty of food and sustenance. It is humanity’s obsession with assigning worth based on material things that causes people to “lock up” food. no one on this planet should be going hungry. There is no food shortage. There is a food distribution problem. I agree that food commodity speculation will lead to a major food crisis. what needs to happen is that as countries start to fight for their rights – as we are seeing across north africa and the middle East – people need to make it a priority to fight for food as a basic right, as something that cannot be “locked up” by those who control the vast majority of the world’s wealth and use basic needs as a way to keep populations from rising up.

opinions expressed by contributing writers do not necessarily reflect the views of The halal Journal. www.halaljournal.com

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Words by Naazish YarKhan Photos by Budi Palmer

e’ve all heard of Fashion Shows and some even live by their dictates. At the Celebration of Believing Women, an Interfaith Fashion and Entertainment Extravaganza, held at the 7th Annual Muslim Journal Awards & Conference, I was awestruck. It was at this most unlikely of events, that I experienced my identity as a Muslim receiving a most spiritual boost. The soothing voice of African American Muslim, Amira Wazeer, filled the room. Before an all female audience, the models confidently sashayed and strutted, their stilettos clicking against the make shift catwalk. Absent were the cookie cutter nymphs we have come to associate with models – faces and bodies that are essentially clones of one another, but barely reflect those of the rest of the world. Here, instead, were women in whose faces you saw the eyes of a woman you’d meet across the fence, the jaw of a lady you’d befriended at a neighbour’s home, the reflection of a woman peering at you from your own mirror. On the catwalk were models and designers, of every race, from all over the world, their hair covered, as traditionally required in Islam. One of the designers, Indriya Rusmana Dani, was from Indonesia. She is an accomplished print and runway fashion model, TV personality, writer and part of the Indonesian female vocal group, SaQina, where she provides both lyrics and vocals.

The Halal Journal | April-June 2011 |

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colours, lines and prints reflected a meshing of South Asian, African, Middle Eastern and American influences. Khaki and gold, silk and linen, the styles spoke of modesty – a commitment to ‘haya’ whether in public, at home or heading out to the gym. No peek-a-boo slits, no sleeves that grazed at the elbows, no teasing necklines or leggings that stopped at the calves of your legs. The outfits on display had neck lines that were filled in with fabric even where originally a Khameez or Kurti neckline typically has no fabric. Unlike many other Muslim fashion shows, the Celebration of Believing Women did not beckon me to flirt with the boundaries of my faith with clothing that was sheer, or had revealing waistlines and low backs, or where sleeves disappeared at the shoulder. There were fashionable teens, short women, tall women, thin women, large women, mothers,

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grandmothers... and yes I am still talking about the models. They looked just as regal whether they modelled designer evening, business or sporting wear. I had not known there were fashion shows that avoided selling dreams that the average woman would never fit into. Living up to its name and Islamic principles, the Celebration of Believing Women honoured womanhood – God’s handiwork – in all shapes, sizes and hues. There was no need to look 18 or be a size zero to qualify. As I turned into bed that night, I wondered at His ways. To think that I happened to be at the Muslim Journal Awards & Conference originally as a business trip. I was there to talk about Halal, as a representative of the Islamic Food and Nutrition Council of America (IFANCA) and its clients Saffron Road and Cabot Cheese, all of whom are associated with Halal. Who would have imagined that I’d come on a business trip, sit through a fashion show, and leave with a renewed sense of conviction in my Islam? The fashion show had been a reflection of a Halal lifestyle and our Halal choices at a time when dressing both fashionably and modestly at the same time is a coup. The evening was an appreciation of our inner beauty, a merging of various races, regions and religions and all of it cocooned in Islamic principles, to make one successful whole. It was, as I like to say, Allah’s beautiful Ummah undulating before my very eyes. This group of beautiful women will be re-congregating in Atlanta, GA for the show’s 25th Anniversary on 8 May 2011. (www.interfaithcelebrations.net) It will be quite an experience!

*About the Author: Naazish YarKhan is a Halal industry insider and consults as a Content and Media strategist. An editor and writer, she has been published internationally, in over 35 publications. Her commentaries have aired on National Public Radio in the US, and her clients include Teachers College, Columbia University; IFANCA; Med-Diet; Mint Copy, Canada and the Chicago Crescent. She expects to graduate with an MSc from Northwestern University in 2011. Opinions expressed by contributing writers do not necessarily reflect the views of The Halal Journal. The Halal Journal | April-June 2011 |

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GSM Mobile Quran MQ3500 GsM Mobile Quran MQ3500 is a unique two-sIM mobile phone that not only acts as a phone but also as a digital Qur’an. apart from the double sIM feature, the digital Qur’an comes with exciting new features which include Qur’an & Books Different Font selection; complete Qur’an recitation in the voices of seven famous Qari (recitors); auto silent Mode during Prayer Times in Masjid; 26 languages Qur’an Translations; and complete Tafseer and authentic hadith Books collection. Find this phone cum digital Qur’an interesting? read on to know more about this genius invention... GsM Mobile features include Bluetooth; FM radio; Talktime of 150 minutes and standby time of 4 days; Interface in arabic, english, Persian, Portuguese, russian and Turkish; GsM 900/Dcs 1800; 1,000 Phone Book; call history; sMs, MMs, GPrs and WaP available; Image Viewer; Video Player; Voice recorder/ Player; True colour TFT lcD; camera; sD card support; slim and compact Design; screen size: 2.0” and screen resolution: 176 × 220. GsM Mobile Quran MQ3500 comes with accessories such as

earphones, rechargeable battery, mobile phone charger, user manual, Qibla compass, surah index and usB cable for battery charging. Its Digital Qur’an features include the complete Qur’an with recitation of voices of the world’s top seven recitors (abdul rahman sudais, saad al-Ghamdi, Maher al-Moeqali, abu Bakar shatri, Mishary Bin rashid, ali al-hudaifi, and siddiq al-Manshawi), beautiful uthmanic arabic text style font that enhances the true spirit of reading the Qur’an, bookmarking of surah or Verse, and synchronised Qur’an text and translation with audio recitation. The Qur’an is translated to 26 different languages namely albanian, azerbaijani, Bosnian, Dutch, english, Finnish, French, German, hausa, Indonesian, Italian, latin, Malay, Malayalam, Persian, Polish, Portuguese, russian, somali, spanish, swahili, Tamil, Thai, Transliteration, Turkish, and urdu. Worldwide prayer times and Qibla direction are also available with this device. Get your own GsM Mobile Qur’an MQ3500 now from http://enmac.my/ mq3500.html at only rM399.00!

Gaining Greater Insight into Islam New book uses conversations between three friends to provide insight into the Muslim point of view... muslims comprise approximately 23 per cent of the world’s population. But how much does the average american know about the third abrahamic faith? The Restless Wind and Shifting Sands (published by iuniverse) – the new book by author and Politico mafioso staff commentator, harry j. Sweeney – seeks to enlighten readers about the truths and misconceptions of Islam. Examining Islam through the eyes of three friends, a moderate, a mainstream follower and a radical, The Restless Wind and Shifting Sands uses conversations between a trio of friends to explain the three points of view. Their arguments actually present and describe The halal Journal | April-June 2011 |

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About Harry J. Sweeney sweeney served in Military Intelligence for 20 years. While he spent two years in Berlin, the majority of his career was spent in asia as an analyst and translator. after leaving Military Intelligence, sweeney went on to spend another 20 years as a region chief for the us Department of education. he attended Yale, the university of Maryland, Temple university and rutgers state university for undergraduate and graduate school. sweeney is a regular speaker on Islamic matters for local and nearby communities providing frequent talks on recent issues.

features Worldwide Prayer Times and Qibla Direction: •• Thousands of cities in the whole world •• Auto Silent Mode in Mosque during prayer times •• Fajr, Shuruk, Zuhr, Asr, Maghrib, Isha’ •• Juristic (Madhab) Setting •• Graphical Qibla Direction Reference •• Prayer Time Local Mosque and adhan Time adjustment option •• Prayer times are calculated on “World Muslim league” method for different cities (worldwide) Qur’an Tafseer: Complete collection of authentic Tafseer Books text with Chapters and Section Indexing: •• Tafseer Ibne Katheer (Arabic) •• Tafseer Jalalain (Arabic) •• Tafseer Al Qurtabi (Arabic)

•• Tafseer Al Tabari (Arabic) •• Tafseer Ibne Katheer (English) •• Tafseer Ibne Katheer (Urdu) Ahadith Collection: Complete collection of authentic Ahadith Books text with Chapters and Section Indexing Supplication (Doa) Books: •• Daily Adhkar (Arabic) •• Hisan ul Muslim (Arabic) •• Supplications Collection (Arabic) •• Supplications Collection (English) •• Hisan ul Muslim (English) Other Islamic Books: •• Al Raheeq ul Makhtum (Arabic) •• Qasas ul Ambiya (Arabic) •• Ahkam ut Tajweed (Arabic)

important aspects of Islam, including but not limited to, honour killing, Shariah, Predestination, forced marriages, important chapters of the Quran known as Surahs, the treatment of women, american troops, martyrdom and many other factors of muslim life. To further highlight the differing opinions in the muslim world, The Restless Wind and Shifting Sands also introduces other characters including the wives of the main characters, a Shariah judge and three British muslims in london. while the subject matter of The Restless Wind and Shifting Sands is vast, it is easily digestible to readers in this conversational format and frequently injects humour to relieve the tension produced by the arguments and the subject matter. The Restless Wind and Shifting Sands’ three main characters are Iraqi muslims residing in Iraq during the Iraq war. They are the best of friends and their wives are friends as well. This closeness makes their characters easier for readers to identify with and thus their discussions easier to follow. They are men of conscience who do not like everything they see around them, but for different reasons. It is these three differing views that The Restless Wind and Shifting Sands uses to inform readers of the spectrum of views in the muslim world. with a forward penned by author and historian, Dr. Steven carol, The Restless Wind and Shifting Sands is an expertly written and highly informative book that is a must for anyone wishing to garner a deeper understanding of the intricacies of the Islamic point of view. www.halaljournal.com

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mErcan DEDE a.k.a. Dj arKIn allEn

Fusing the sounds of the East and West By najmia Zulkarnain

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Genre: Drama Movie Rating Indication: PG-13 Produced by: QProductions & Dana o Production in association with ameena sky Media & Deep Blue Pictures Main Cast: evan ross, nia long, roger Guenveur smith, summer Bashil, Dorian Missick, Danny Glover Casting by: aleta chapel CSA Score Composed by: Misha segal Edited by: christopher scott cherot Production Designer: Joey ostrander Director of Photography: Ian Dudley Line Producer: James Yi Co-producers: Julia Morgan, James Yi, eddie rubin, Danny Mooney executive Producer: Dana J. Wright Producer: samad Davis Written & Directed by: Qasim “Q” Basir Festivals & Awards: Winner, Best narrative Feature – 14th annual urbanworld Film Festival 2010; official selection – 46th annual chicago Int’l Film Festival 2010; official selection – 34th annual cairo Int’l Film Festival 2010

“When you are everywhere, you are nowhere. When you are somewhere, you are everywhere.” – rumi. .

This is the driving force behind a brilliant fusion between the sounds of the East and west heard in the music of mercan Dede, otherwise known by his alter ego, Dj arkin allen. a well-established and well-known world music artist, this Turkish/ canadian artist, composer, producer, Dj, and ney/ Darbukah/ Kanun player is truly one of a kind. In continuous search for an honest expression which delivers core Sufi philosophy and teachings, mercan Dede believes in following his heart wherever it takes him. he is somewhere, and therefore everywhere. he has travelled and performed in various corners of the world, and known to collaborate with national artists who share similar direction in music. he believes in no separation, and has been able to achieve harmony between oriental and Electronic sounds. Born in Bursa, Turkey in 1966, a small village where he grew up poor, Dede fell in love with the ney (reed flute) at the age of six. with an undying thirst, he later began to learn during his studies, when he made his own ney out of a plastic plumbing pipe. he studied journalism and moved to canada as an art teacher. To pay off rent, he worked at a bar where he got exposed to the art of Deejaying. music was his calling where he started to get involved in spinning during the start of the Techno revolution and by the mid-80’s, he was travelling to do techno-tribal house gigs. with a unique ear and passion still for traditional/ folkloric music, alter-ego Dj arkin allen debuted as mercan Dede with his first album, Sufi Dreams, in 1987. Dede, in Sufi traditions means ‘the elder’, and Dede has since encapsulated the meaning by projecting strong spiritual elements into his music. he has collaborated with many world artists such as Susheela rama, Dhafer Youssef, and hugh marsh and performed in renowned events such as the montreal jazz Festival and womEX. his album Su, stayed at no. 1 on the European world music charts for two months. he is also commissioned by the Turkish ministry of culture as the music director of the Guldestan Project, one which represents Turkish culture and arts all around the globe. Dede’s music speaks a universal language. Evoking profound emotions and awakening the spiritual senses, his music transcends all barriers and pre-conception. he achieves a harmony between traditional acoustic sounds, arranged in unique composition and supported by dance beats and electronic sounds. It is rich in layers and textures where each individual sound of percussions, strings, flute and vocals intertwine in an elaborate conversation under one subject. The emotions which the music evokes are one which can be understood across various cultures, age and backgrounds. The ney, an archetypal Sufi instrument, dances throughout all songs with a strong, mysterious presence. It brings about a mystical element directing the listener’s emotions to one spot – the heart. one can hear variation of instruments and beats played in a nontraditional manner, yet the core sound is very much grounded in traditional music. There is no separation between the two contrasting elements of western, Electronic/ Dance beats and techniques to that of classical/ Folkloric sounds. mercan Dede achieves counterpoint in his music which is the essence of Sufism. he synthesised Sufi music with all its layers of sounds and traditions in showcasing that everything exists with its opposite. In the end, the result is a language which speaks to all hearts and minds. www.halaljournal.com

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mooz-lum Mooz-lum is a groundbreaking new film about a Muslim boy who comes of age while in college against a politically charged 9/11 backdrop, with deep personal and familial traumas to overcome, and a search for identity that must reconcile his own difficult history with his new changed reality. Initially promoted through social media (with 85,362 followers on their Facebook Fanpage at the time of publication), Mooz-lum is a movie written and directed by Qasim “Q” Basir. Mooz-lum offers rare depiction of Muslims living in America facing challenges after 9/11. This one-of-a-kind film is set to break down stereotypes and educating Muslims and the non-Muslims in masses. Mooz-Lum was released on 2 February 2011 in selected cities in the USA. *note: Images taken from Mooz-lum Facebook Fanpage

The halal Journal | April-June 2011 |

3/26/11 9:58:36 AM

parting words

Marketing Islamic Art in the contemporary world

I-NAI Venture Holdings Sdn Bhd is Malaysia’s leading custom-designed architectural ornaments and decorative products manufacturer, and was first established in 1986. Over the years, I-NAI’s fine works of art have adorned a number of buildings in Malaysia that are now considered iconic such as the National Palace, the Prime Minister’s home, Palace of Justice in Putrajaya, the Putrajaya Mosque and the Kuala Lumpur International Airport Mosque. The Halal Journal speaks to one of I-NAI’s founders, Nik Mazlan, for his take on Islamic art, the universal values behind it, and current trends. What are the basic requirements that make Islamic art what it is? Craftsmen? Certain rules/ principles? Materials? To me, Islamic art is not just about pure aesthetics, but is also about the essence behind it. If it is done to show off one’s ego and arrogance, then it is something that conflicts with the principles of Islamic arts. Therefore, the basic requirement that makes Islamic art what it is, is by holding closely to the basic principles of Islam, as defined by the Qur’an and Hadith, which encompasses all aspects of life. Any deviation from that is obviously un-Islamic. Besides, the word ‘Islam’ itself is derived from the Arabic root, ‘Salema’, which means peace, purity, submission and obedience.

Nik Mazlan Founder, I-NAI

“God has clearly stated that whatever He has created has reasons behind it and has its balance, proportion and its very own measurement for us to really ponder on.”

Can you explain the universal idea behind most of the patterns in Islamic arts? It is all about love, beauty, peace and unity, which is also our company’s tagline! That is a universal idea indeed. Most patterns in Islamic art are developed with a lot of passion and in-depth thoughts about God’s creations. God has clearly stated that whatever He has created has reasons behind it and has its balance, proportion and its very own measurement for us to really ponder on. The underlying principle also is the Hadith that says: “God is beautiful and loves beauty.” Who in this world does not like beauty? But of course everyone sees and interprets it differently. From your observation, what would you say about the people’s level of awareness on Islamic arts in the world today? In the rat race now, people are feeling the stress and are looking for ways to balance their lives. People are starting to search for answers, and we can see the increasing awareness on the dire need for the true meaning of life. This is exactly what Islamic art is about – it’s very meaningful and actually creates awareness about life. Islamic arts are in fact bio-mimicking nature. People are beginning to realise the purity of these art forms and we can find growing interest from both Muslims and non-Muslims to explore and own the masterpiece. From your experience, how should Islamic arts be marketed in the contemporary world today, and what are the challenges in doing so? Just keep abreast with the advancements of technologies. We have social networking media, which definitely is a powerful tool for getting ourselves known. We must consistently create awareness to the people at large on the true meaning of Islamic art. Follow what other successful businesses do; if they can be successful, why can’t we? Nothing is impossible. Keep the culture of innovation in the company strong and remain true to the company’s philosophy, and most importantly, be passionate and persistent (istiqamah), in whatever we are doing. Our mission and vision have always been very clear from the day we set up our business and we do not intend to move away from our goal. We also believe in smart partnerships, strategic collaborations, and joint ventures to expand our business further. After all, two heads are better than one! Photos above: Some of I-NAI’s masterpieces The Halal Journal | April-June 2011 |

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