The how of adopting blockchain route for the halal meat industry

By Jamari Mohtar, Director, Media and Communications, and Jason Loh Seong Wei, Head of Social, Law & Human Rights of EMIR Research,

In the wake of the expose on the domestic halal meat industry late last year revolving around a cartel comprising foreign importers, EMIR Research has proposed that the relevant authorities to go the blockchain technology route to prevent such recurrence.

Apparently since October, the Royal Malaysian Custom Department (RMCD) has already implemented the use of blockchain-enabled TradeLens platform in Malaysia – jointly developed by AP Moller-Maersk with IBM, which is based on the Collaboration Application Programming Interface (API) concept – to modernise the shipping processes, create greater transparency and enhance customer satisfaction.

Joining the TradeLens platform marked the beginning of RMCD’s effort to digitise its operations which will boost efficiency, transparency and collaboration across supply chains, in addition to fulfilling its mission to facilitate legitimate trade, help combat smuggling and modernise the national logistics systems in support of Malaysia’s digital economy aspirations.

By digitising shipping processes, TradeLens will provide RMCD with an automatic and immutable tracking tool which will lead to a more highly secure, transparent, efficient and simpler workflow, with near real-time information sharing from a diverse network of ecosystem members.

It is no coincidence the cartel’s activities all these years were only unmasked once blockchain technology was deployed via the TradeLens platform, which is a digital global trade platform that enables more efficient and accurate container tracking and information sharing among platform members.

Indeed, it is a jarring indication of just how deep corruption among the few can severely impact the lives, food consumption and religious beliefs of millions of people. And the hitherto disjointed and fragmented supply chain processes that provided the “security gaps” for the meat cartel to exploit can be remedied with the extension and integration of blockchain technology.

According to experts, TradeLens digitises the voluminous, time consuming paper-based shipping processes which will enable the relevant authorities to receive shipping data as soon as containers leave the port of origin.

Paper-based procedures are said to have created some pain points throughout the global supply chain system, with the World Trade Organization (WTO) estimating digital technologies will have a profound impact on global trade, adding up to 34 percentage points to trade growth by 2030.

TradeLens will give RMCD more time to prepare for the arrival of shipments. This will enable more efficient and thorough fraud and forgery inspection as well as a more consistent and transparent revenue collection process.

The blockchain platform will also allow all logistic activities including trucking, warehousing, shipping and freight forwarding at both domestic and global levels to be integrated which will also improve the sharing of data-rich information through a single platform.

It also promotes trust among trading partners as the record of all transactions is shared within the network and permissioned parties can access the data in real-time, making it possible for RMCD to have permissioned visibility into supply chain activities with verified, highly trusted and near real-time data.

Besides Malaysia, a number of government authorities from other countries, shipping agencies, ocean carriers and port authorities have partnered with IBM and AP Moller globally in the use of TradeLens platform.

Moving forward, TradeLens could be the base by which the entire halal certification process and network driven by blockchain technology is operationalised, as it can be extended to be included as part of the entire halal food supply chain and transaction processes.

For this to be successful, the first and foremost requirement is the participation of industry players and stakeholders, especially the importers of halal meat, and this should be made mandatory, that is, any halal meat importers or their foreign associates must be mandated by law to be members of the TradeLens platform so that their supply chain activities including freighting and warehousing can be verified by the blockchain-enabled TradeLens platform resulting in highly trusted and near real-time data, and then shared among permissioned members of the platform.

To make this mandatory requires amending the Trade Description Act 2011, specifically in relation to the secondary legislation of the Trade Descriptions [Definition of Halal] Order, 2011 as well as the Trade Descriptions [Certification and Marking of Halal] Order, 2011).

The Department of Islamic Development Malaysia (Jakim) could then create its own real-time database containing information of all foreign suppliers and the concomitant transactions for oversight, monitoring and audit purposes.

This will promote digital security as well as complement and supplement the tamper-proof character of blockchain technology by ensuring hashed signatures can be double-checked against Jakim’s own real-time database.

At the same time, the real-time database should be de-centralised so that it’s inter-operable and inter-face capable with the other government agencies, namely the Malaysian Quarantine and Inspection Services Department (Maqis) under the Ministry of Agriculture & Food Industries that issue the approval permit (AP), and the Enforcement Division of the Ministry of Domestic Trade & Consumer Affairs. Inter-operability is the key here which in general means the ability of different systems to “talk” to each other.

The real-time database mimics and emulates the function of TradeLens blockchain technology in data-sharing but without the need to duplicate the transaction processes themselves.

So, the Jakim database can be integrated into and provide support and complement the role of the TradeLens system. In effect, the Jakim database performs the background role of monitoring the TradeLens system – enhancing the integrity of both data provenance and the overall transaction processes of the blockchain technology.

Data provenance is one of the most significant real-world applications of blockchain technology which refers to the documentation of where a piece of data comes from and the processes and methodology by which it was produced. It creates a single, secure chain of custody timeline, designed to be tamper-proof.

The system can be used to provide customers with a ‘story’ about each product on the sources, materials, locations, processes, ingredients and suppliers the businesses use, and enables businesses to substantiate claims about their products using real-time data. With such a system, provenance tracking of where each piece of data comes from and whether it is still up-to-date becomes a breeze.

The provenance blockchain has complete information about the addresses and their supply chain path right from source to the point of consumer purchase, giving the much-needed assurance for Muslims that the “halal-ness” of the food on their table can be traced back through all the locations of the halal supply chains that began with the original halal farm or livestock farm, including the identity of the farmers or livestock breeders.

Blockchain technology would inject trust into a halal supply chain and value chain of a brand owner who would be better able to guarantee halal integrity. They could also be integrated into the wider sustainability and corporate responsibility systems to extend the brand market beyond Muslim consumers.

Perhaps also, as part of the effort to further integrate the Jakim database into TradeLens rather than merely constructing a parallel, albeit inter-faced system, is the requirement for Jakim to have its own miners (cryptographers) as part of the blockchain transactions seen as set in the context of the wider halal certification process.

In this regard, Jakim needs to do what RMCD did – collaborate with expert entities in blockchain technology such as IBM to “blockchainise” its halal certification operation where data provenance is a must.

As the Religious Affairs Minister, Datuk Seri Dr Zulkifli Mohamad is seeking feedback on halal certification process abroad, this article can be seen as one giving the necessary and critical feedback.

In conclusion, it’s time to ramp up the digitalisation of the halal certification process and what better way than to assimilate blockchain technology as a sure-fire way to ensure halal integrity and strict compliance.