“Halal & Shariah Compliant”– Processes or Values?

Process OR Values?

With 23% or 1.57 billion people constituting the global Muslim community, a whole lot has already been written and said about the ever-increasing business opportunities in the (and for the) Halal industry.  With the industry’s global annual meet coming up (in Kuala Lumpur in April) more of these opportunities would get highlighted.

So here’s a question for businesses (in the industry) as well as those evalutating the potential:
Do businesses (
in this category) understand who their customers are and what they want?

 

 

This question came up whilst in a discussion with a very learned friend of mine (in Islamic finance) on the key issue of– “Is Halal & Shari’ah a Process or are they Value concepts”.

Whilst the (current) issues of convergence (of the Islamic Finance and Halal industries) and its potential (or should one say explosive!) growth and emergence of new product and service segments (fashion, cosmetics, hospitality) are being thrashed out,    the key issues of consumer intelligence (and insight for business growth planning), comprehension (of the terms Halal and Shari’ah by the consumers) and understanding of the latent emotional need (of the consumer) for a specific value system from commercial enterprises still remains unanswered.

A lot of consumer and corporate research has been done (and is available), by highly experienced and professional organisations, covering specific areas of information that’s extremely helpful in business planning.

Yet on-ground activties by Halal and Islamic Finance organisations still show a high extent of  “head-in-the-clouds” type of business approach.  The consumer world has changed. Within that the global muslim community (as the mainstay for both Halal and Islamic Finance has undergone a paradigm shift in their attitudes, perceptions and behaviour)!

Isn’t it time we left the cool comforts of our air-conditioned offices and actually spoke to end-users of our products and services and understood how, by delivering a value-benefit can we (as commercial businesses) be sustainable, profitable and respected?

For starters the two industries could get consumer-centric and undertake market education on the two basic terms–
Halal & Shari’ah compliant– and establish if they are processes or values.

Let’s take a quick look at some basic definations:

Halal–“as per Wikipedia”–> Halal (Arabic:حلال, ḥalāl, Halaal; means lawful or legal) is an Arabic term designating any object or an action which is permissible to use or engage in, according to Islamic law. It is the opposite of haraam. The term is widely used to designate food seen as permissible according to Islamic law (Sharia, الشريعة الإسلامية).

Usage of the term:
The use of the term varies between Arabic-speaking communities and non-Arabic-speaking ones.

In Arabic-speaking countries, the term is used to describe anything permissible under Islamic law, in contrast to haraam, that which is forbidden. This includes human behavior, speech communication, clothing, conduct, manner and dietary laws.

In non-Arabic-speaking countries, the term is most commonly used in the narrower context of just Muslim dietary laws, especially where meat and poultry are concerned, though it can be used for the more general meaning, as well.

Shariah Compliant–>Shariah (Arabic: ‘‎شريعة Šarīʿa; [ʃɑˈriːɑ]) is an Arabic word meaning ‘way’ or ‘path’. It is used to refer both to the Islamic system of law and the totality of the Islamic way of life. Sharia deals with many things, including politics, economics, banking, business, contracts, family, sexuality, hygiene, and social issues.

Usage of the term:
Came about from Islamic banking–(as per Wikipedia)–Islamic banking refers to a system of banking or banking activity that is consistent with the principles of Islamic law (Sharia) and its practical application through the development of Islamic economics.

I looked into how these words/terms are actually comprehended and, surprisingly, I came across a few references of how often “halal” is not understood clearly, and is associated only with food and how Muslims consumers themselves are, a bit in the dark due to lack of transparent information.

A dipstick study in UK (in this context) reveals:
The word ‘halal’ is used mainly in the food context, as being clean and pure. Shariah is understood as Islamic law.

Here’s some published references:

  1. Consumers Need More Info on Halal Issues
    KUALA LUMPUR, (Bernama) — There is a dearth of information regarding the halal status on many of the products consumed or used by Muslims. Therefore, it is only appropriate that that Muslims are provided with the information that they need and one of the easiest way to provide the required information is through the details on the packaging.
  2. Halal Is Not A Simple Matter
    On and off Muslims in the nation are startled by claims that the Halal status for some of the products that they consume were doubtful, and the immediate reaction is Muslim consumers become more circumspect in buying the related products.
  3. It’s Not The Halal You Expected
    As debate and discussion on the meaning of halal grows, mainstream supermarkets, food producers, and restaurants are finding that there is plenty of overlap between traditional definitions of halal food and Western standards of quality and ethics.

These few bytes of news reports and feedback from some Muslim friends and associates (of various nationalities) clearly brings forth, that the common man’s usage of the terms and their comprehension are not the same all over. Infact, the perception is that, “Halal is the process of meat and poultry products, slaughtered as per the process and packed/processed according to the country’s halal certification process”.

Shari’ah, on the other hand, is associated with Islamic financial products that adhere to the principles of Islamic law.

But Halal and  Shari’ah are much more than this current comprehension!

The questions that arise are:

  1. Are Halal & Shari’ah compliance only processes then?
  2. Or are they “value concepts” that can be used to develop sustainable business strategies that deliver benefits?

Intriguing questions,as in the spirit of Shari’ah, a business is deemed halal if it is, end to end, adhering to certain principles and not just the manufacturing or slaughtering process.For eg: if a food brand, marketing canned beef obtains the halal certification, but its business operations like financing is using conventional finance and its organisational culture is not based on Islamic ethics and its governance is more regulatory than civic responsibility oriented–Is it truly Halal?

Similarly, if a financial product re-words, re-processes the ‘interest’ component in its product make up and ‘complies’ with known Islamic financial legalities and becomes ‘shariah-compliant’ does that make the product halal?

Questions to which,perhaps, there will be clear answers  once organisations (in these two industries) undergo a cultural shift and look at Halal and Shari’ah as (critically needed) ethical values and focus on being consumer-centric in their business planning in order to be sustainably competitive across time. Such a change will provide organisations a new business model that would be fully value centric than the current practice of being stakeholder profit centric.

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2 thoughts on ““Halal & Shariah Compliant”– Processes or Values?

  1. David Vicary says:

    This article raises some important points and in more ways than one aligns with my views around EPL. Education perception and Liquidity. Halal needs global standards just as IF needs them. Greater alignment between can be achieved by the two industries if some synergy is created around both global standards and extoling the value of the brand. Education will be needed to ensure that the brand values can be articulated and understood. We need to speak to peoples listening and ensure that any mis-perceptions are corrected. Plenty of work to do here and not a moment to lose.

    1. Joy Abdullah says:

      In the upcoming WHF (World Halal Forum) perhaps the issue of global standards, not just for the Halal food industry, but for other consumer products and servcies can be
      addressed and some action identified. Just as IFSB is the champion of standards in Islamic Finance perhaps the IHF could champion the same for the global halal industry.

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