Product Safety in Indonesia (2026): Recalls, Halal Compliance and Trade-Driven Regulatory Change

Indonesia’s product liability and safety landscape is entering a period of heightened scrutiny, shaped by tighter sectoral oversight, expanding compliance regimes and greater cross-border regulatory interaction. While Indonesia has a single, overarching Law No 8 of 1999 on Consumer Protection (“CP Law”), it has multiple regulators exercising supervisory and enforcement authority depending on the relevant sector. In some industries, sectoral regulators have issued detailed implementing regulations that supplement the CP Law, while in others the regulatory framework continues to rely largely on the general provisions of that law without sector–specific elaboration.

Against such backdrops, authorities are placing renewed emphasis on traceability, transparent corrective action and supply-chain accountability. The developments below highlight three areas likely to drive risk and compliance priorities in 2026: (i) the specific recall mechanism in the motor vehicle sector; (ii) the scope and enforcement of mandatory halal product assurance as it moves into its next implementation phase; and (iii) the potential consumer-protection implications of a reciprocal trade framework between Indonesia and the United States.

Product liability in the motor vehicle sector

Product liability and consumer protection are critical issues in modern commerce, particularly in industries where defective goods can pose significant risks to public safety. In Indonesia, the framework for consumer protection is established under CP Law, which places clear obligations on business actors to ensure the safety and integrity of the products they trade.

Legal basis for product recall

Article 8(2) of the CP Law explicitly prohibits business actors from trading damaged, defective, used, or contaminated goods on the market without full and accurate disclosure to consumers. Non-compliance with this provision gives rise to a mandatory product recall under Article 8(4) of the CP Law. This recall mechanism functions both as a consumer protection measure and as a means of enforcing responsibility and compliance among business actors.

Special regulation in the motor vehicle sector

Given its scale and implications for public safety, the automotive industry is subject to sector-specific regulatory oversight. Motor vehicle recalls are governed by the Regulation of the Minister of Transportation No PM 53 of 2019 on the Procedure for Motor Vehicle Product Recall (“MOTR 53/2019”). Under the MOTR 53/2019, provisions related to the recall of the motor vehicle may be carried out by the assembler, manufacturer, importer, distributor, or brand holder of the motor vehicle in Indonesia (“Business Actors”).

Furthermore, MOTR 53/2019 establishes  the mechanism for Business Actors to conduct product recalls, by requiring them to carry out the following steps: (i) submit a recall plan to the Ministry of Transportation (“MOT”) at least 14 days before implementation; (ii) formally notify affected consumers of the recalled motor vehicle; (iii) inspect and remedy the recalled products; and (iv) report the results of the recall to the MOT.

The recall plan that must be submitted to the MOT, as mentioned above, must at a minimum contain the following information: (i) the name of the company, (ii) address, (iii) brand/type, (iv) period of manufacture/assembly year, (v) number of vehicles, (vi) issues, (vii) impact of the defect, (viii) reporting period), and (ix) method of notification to consumers.

Furthermore, the report on the results of the recall must be submitted to the MOT at least twice a year for a period of two years from the date on which the product recall is determined.

These requirements are intended to ensure transparent and effective recall implementation. In urgent circumstances, however, a recall may be initiated prior to the submission of the recall plan to the MOT. This exception reflects the principle of prioritising consumer safety, whereby immediate action to prevent harm takes precedence over administrative formalities.

This urgent-recall mechanism serves two important functions:

• Risk mitigation, by allowing defective vehicles to be withdrawn from circulation promptly, thereby reducing the risk of accidents or consumer injury.
• Regulatory accountability, by ensuring that even expedited recalls remain subject to monitoring and evaluation, thereby preserving transparency and compliance with statutory obligations.

By balancing urgency with accountability, the framework under MOTR 53/2019 reinforces both consumer protection and business responsibility, while also aligning Indonesia’s automotive recall regime with international best practices.

Good faith and consumer protection

Beyond compliance, a product recall serves as an expression of good faith by business actors. It demonstrates a commitment to minimising consumer losses and preventing further harm. By proactively recalling defective products, businesses reinforce consumer trust and uphold ethical standards in trade.

Protecting business interests

The importance of product recall extends to the protection of business actors themselves. Failure to conduct a recall exposes companies to significant legal risks, including:

• Civil lawsuits filed by consumers;
• Criminal reports submitted to local authorities; and
• Administrative sanctions imposed by supervisory agencies.

Thus, recall procedures function as a safeguard against litigation and reputational damage, making them an indispensable part of responsible business practice.

2026: the next phase of Indonesia’s mandatory halal product assurance

Halal product assurance as a consumer protection framework

Halal product assurance is an integral component of consumer protection in Indonesia. As home to the world’s largest Muslim population, the state has a responsibility to ensure that products consumed and used by the public comply with halal standards. Beyond religious compliance, the halal assurance regime also operates as a mechanism to safeguard product safety and consumer rights by requiring businesses to maintain control across the end-to-end halal supply chain. This includes controls over sourcing, production, storage, packaging, distribution, sale, and serving or presentation, as well as appropriate labelling, to prevent contamination and consumer misinformation.

Phased implementation of mandatory Halal certification

Under Law No 33 of 2014 on Halal Product Assurance and its implementing regulation, Government Regulation No 42 of 2024, products entering, circulating, or being traded in Indonesia are required to be halal-certified, with a halal certificate serving as evidence of a product’s halal status. This obligation is being implemented in stages based on product category.

The first phase took effect on 18 October 2024, requiring halal certification for food and beverage products and slaughter-related products and services offered by large and medium-sized enterprises. The second phase will take effect on 18 October 2026, significantly expanding the scope of mandatory certification to include:

• food and beverage products and slaughter-related products and services offered by micro and small enterprises as well as imported products;
• traditional medicines, quasi-drugs, and health supplements;
• cosmetics, chemical products, and genetically modified products;
• clothing consumer goods, including apparel, headgear, and accessories;
• household consumer goods, including household health supplies, household equipment, items used for Islamic religious worship, stationery, and office supplies;
• Class A (low-risk) medical devices; and
• services related to the above products, including logistics.

It is important to note that halal assurance covers the entire supply chain, not merely the end product. Accordingly, as mandated under the applicable regulations and reaffirmed by Indonesia’s Halal Product Assurance Organizing Agency (Badan Penyelenggara Jaminan Produk Halal or BPJPH), storage, packaging, and distribution service providers are also required to obtain halal certification, in accordance with the implementation timeline for the relevant product category. For example, logistics operators handling products subject to mandatory halal certification are expected to implement a halal assurance system, including segregation of halal and non-halal goods, contamination controls, and documented handling procedures.

Mutual recognition agreements (MRAs) and cross-border trade

The mandatory halal certification obligation extends to foreign products imported into Indonesia, with the implementation timeline depending on the relevant product category. Where a product has been certified halal by a foreign halal certification body that has an MRA with BPJPH, the product may be marketed in Indonesia by registering the foreign halal certificate with BPJPH, without undergoing the full domestic certification process. In practice, halal certificates issued by accredited foreign bodies are recognised for the relevant product scope under the applicable MRA. This mechanism is intended to facilitate cross-border trade, reduce duplicative certification, and streamline market access for imports.

As at the date of writing, BPJPH has entered into 109 MRAs with foreign halal certification bodies from 39 countries, and the number of recognised MRAs continues to grow. However, recognition of a foreign halal body does not amount to blanket acceptance of all products it certifies; businesses must ensure that the relevant product category falls within the scope of the applicable MRA and that all administrative requirements are fulfilled. Imported products certified by bodies that do not have MRAs with BPJPH, or products not yet certified by any halal certification body, must undergo the standard domestic certification process.

Importer registration obligations

Under the regulations, the importer (or its authorised representative in Indonesia) is responsible for registering foreign halal certificates with BPJPH where the certificates are issued by foreign certification bodies with MRAs with BPJPH. Legal responsibility is therefore borne by the importer. Where multiple importers or authorised representatives exist for a single product, each must register separately, even where the same foreign producer and product are involved. Registrations are not freely transferable between importers or authorised representatives, to facilitate tracking and to identify the responsible party if issues relating to halal status arise.

Obligations for non-halal products

The regulations also recognise an exception for products derived from non-halal materials. Rather than requiring halal certification, producers of such products must affix a non-halal label that is clearly visible and readable and not easily removed or damaged. Detailed technical requirements on the label’s format, placement, and appearance are expected to be set out in further implementing regulations issued by BPJPH in coordination with relevant ministries or institutions.

Enforcement and sanctions

Non-compliance with halal product assurance requirements may expose businesses to administrative sanctions, including written warnings, monetary penalties, suspension or revocation of halal certificates, and mandatory product withdrawal. Sanctions may be imposed not only for failure to obtain halal certification, but also for failure to apply non-halal labelling (where required), and for failure to maintain halal assurance requirements after certification.

Enforcement trends indicate growing coordination between BPJPH and other regulatory authorities. In particular, BPJPH has strengthened cooperation with the Food and Drug Agency (Badan Pengawas Obat dan Makanan or BPOM), which supervises the safety, quality, and efficacy of food, drugs, cosmetics, and health products in Indonesia. In a recent joint supervision and market monitoring exercise, several halal-certified products were found to contain non-halal ingredients. BPJPH and BPOM ordered their withdrawal from the market, and BPJPH revoked the relevant halal certificates. This underscores two points: halal certification does not eliminate the need for post-market supervision, and businesses remain responsible for ongoing compliance with declared product composition.

What business should anticipate in 2026

Indonesia’s halal product assurance regime is increasingly being enforced as a product integrity and consumer-protection framework, with regulatory exposure where businesses cannot substantiate halal claims across the supply chain.

As the October 2026 deadline approaches, Indonesia’s halal regulatory framework is entering a more comprehensive phase, characterised by an expanded scope of mandatory certification, growing international recognition through MRAs, and more visible enforcement actions.

For businesses operating in or exporting to Indonesia, halal compliance increasingly requires an integrated approach covering product formulation, supply-chain documentation, logistics, and importer arrangements. Early alignment with these expectations will be essential as Indonesia moves towards full implementation of mandatory halal certification.

Reciprocal Trade Agreement between the USA and Republic of Indonesia

The Reciprocal Trade Agreement between Indonesia and the USA (“Trade Agreement”) represents a significant development in Indonesia’s bilateral relationship with the USA, moving beyond tariff adjustments towards a broader framework of regulatory cooperation and market access. While the agreement is primarily economic in nature, its scope inevitably intersects with domestic regulatory regimes, including consumer protection law. Provisions relating to product standards, digital trade, market access for goods and services, and regulatory transparency have the potential to shape how consumer interests are safeguarded in an increasingly open and competitive market.

Through the Trade Agreement, Indonesia has committed to removing tariff and non-tariff barriers, including recognising certain USA standards, and facilitating digital and cross-border trade. From the perspective of the CP Law, these commitments may enhance consumer welfare by increasing product availability and improving quality standards. At the same time, regulatory alignment and trade facilitation may place pressure on domestic authorities to ensure that consumer protection rules, such as those on product safety, information disclosure, data protection, and product recall, continue to be effectively enforced. The agreement does not formally harmonise consumer protection laws between the states, but it may influence the regulatory environment in which those laws operate.

Ultimately, the impact of the Trade Agreement on the CP Law will depend not on the text of the agreement alone, but on how it is implemented in practice. This means the manner in which regulators interpret standards, exercise enforcement powers, and integrate consumer protection considerations into the broader framework will determine whether the Trade Agreement strengthens consumer welfare or exposes regulatory gaps. Accordingly, its implications will only be seen as the Trade Agreement moves from formal commitment to its implementation.