Fact check: Does Halal Certification Fund Terrorism?

Companies that get products halal certified have been targets of a campaign that claims halal certification funds terrorism.

Conducted largely through social media and online networks, Australian anti-Islam groups have been demanding companies that carry halal certification labels drop them.

• The claim: One Nation founder Pauline Hanson says that halal certification is a $3 trillion industry that funds Islamic organisations and terrorism.
• The verdict: Ms Hanson's estimate of a $3 trillion industry conflates the value of the global food market with the value of the halal certification market. While the proceeds of halal certification do fund Islamic organisations, Fact Check could find no evidence money has ever flowed to terrorist groups. Ms Hanson's claim doesn't check out.

This anti-halal campaign was a key demand at recent "reclaim Australia" rallies, held around Australia on Easter Saturday.

Speaking in defence of the reclaim Australia rallies, One Nation leader and founder Pauline Hanson told the Nine Network's Today program that halal certification was a money-making racket.

"It is a profit money-making racket. The money goes into Islamic organisations and has been connected to the Muslim Brotherhood in France and actually also in Canada," she said. 

The Muslim Brotherhood is not a listed terrorist organisation in Australia, but Ms Hanson has made similar claims that explicitly link halal certification, the Muslim Brotherhood and terrorism.

Campaigning in the Queensland election, Ms Hanson said she wanted to ban Australian companies from paying for halal certification.

"It's estimated it's a $3 trillion industry and this money can go to mosques, Islamic schools and it's even estimated that it can go to terrorism," she said.

ABC Fact Check takes a look at the halal certification industry and whether it funds terrorism.

What is halal food?

Halal food is any food that is permitted under Islam. Much like other religions, Islam has rules about which foods can be consumed by Muslims.

Fact Check has produced a fact file, detailing which foods are considered halal, and the process behind halal certification.

A $3 trillion industry?

Fact Check asked Ms Hanson's office for evidence to support her claims about halal certification.

A spokeswoman for One Nation provided the following statement: "There has been plenty of articles written and shows aired, by international and Australian reporters, including ABC."

The Pew Research Center in Washington D.C. estimated the global Muslim population to be 1.6 billion in 2010 and expects it to grow to 2.2 billion by 2030.

A report by business intelligence company Thomson Reuters and New York research firm Dinar Standard estimated global Muslim spending on food and drink at $US1.3 trillion in 2013, representing 18 per cent of global expenditure.

This is predicted to rise to 21 per cent of global food expenditure by 2019.

The report notes that arriving at a definitive figure is difficult because of inconsistencies in standards in different countries, and because there's no consistent data tracking across food ingredients, raw meats and processed food sectors.

The entire market, not just certification

The Thomson Reuters work has been quoted in research by international accounting firm PwC and by the Statistical, Economic and Social Research and Training Centre for Islamic Countries, a subsidiary of the Organisation of Islamic Cooperation.

The Federal Government's trade body Austrade cites 2012 Malaysian research that estimated the value of the halal food industry globally at between $US600 billion and $US2.1 trillion.

None of these figures reach $3 trillion.

In any case, all the estimates are for the value of halal food, not the value of certifying that food.

What is the Australian halal certification industry worth?

There are no regulations compelling Australian companies and organisations that certify halal foods to disclose their fees publicly.

Few food manufacturers who sell halal-certified foods in Australia or for export, or the organisations that certify them, were willing to tell Fact Check how much they pay, or are paid, for certification.

Fact Check contacted dozens of Australian food companies about halal certification, many of whom didn't respond.

Processed food companies, who generally pay a set yearly fee for halal certification, were more willing to talk, but few would disclose exactly what this costs.

The Byron Bay Cookie Company said its annual halal certification fee was around $1,500 a year.

This represented about 0.003 per cent of its total cost of doing business, a spokesman told Fact Check.

Geoff Hutchinson, a director of the Fleurieu Milk Company, which forfeited a $50,000 contract to supply yoghurt to Emirates airlines after a sustained anti-halal social media campaign, says halal certification for the contract cost about $1,000, or two per cent of the contract.

A spokeswoman for Nestle said the fees the company paid were negligible in the context of its total business.

"They do not influence the price at which we sell our products. We don't pass this cost on," she said.

Meat processing and halal

Fact Check contacted several meat processing companies about halal certification, most of whom supply both the domestic and export markets. Many refused to speak to Fact Check.

Meat processing companies, unlike other food companies, generally pay for their halal certification with an annual fee and a cost per carton of exported meat.

Hasan Tanrikut, a halal supervisor from the Global Halal Trade Centre Pty Ltd told Fact Check that certifications of abattoirs for example, which are done four times a year, cost approximately $2,000 to $3,000 per audit.

He said halal certification of meat was charged at 25 cents per carton exported.

Andrew Trigg, director of government and media relations for Graincorp, says the company's halal certification is a "pretty minor" cost.

"There's not huge customer demand, but it does give Graincorp a slight market advantage," he said.

Who certifies halal food in Australia?

Raihan Ismail, an associate lecturer in the Centre for Arab and Islamic Studies at ANU, told Fact Check that theoretically any Muslim can certify a food as halal, for example by being present when an animal is slaughtered.

In practice, a number of organisations are involved in the halal certification business in Australia, certifying food for domestic consumption and for export.

The only government regulations for halal certification concern meat for export.

When it comes to certifying domestic foods, such as biscuits and milk, a Department of Agriculture spokeswoman said the department had no involvement in these arrangements and it was a commercial matter between food businesses and certifying organisations.

The department has an Approved Arrangement with 21 Islamic organisations to certify halal meat and red meat products for export.

This is part of the Australian Government Authorised Halal Program (AGAHP).

The department spokeswoman said the government's only interest in having these arrangements in place was to ensure that Australian producers had technical access to markets that require halal red meat. 

Islamic organisations that want to have an approved arrangement with the Government, among other things, must:

• be recognised by a local mosque
• issue Muslim slaughtermen with identity cards
• be recognised by an importing country authority

Foreign recognition for certifiers

Most Australian halal certifiers first gain recognition from a foreign country.

This is particularly important for halal certifiers who want to gain accreditation with Indonesia - the third biggest market for Australian food exports in 2012-13.

Halal certification recognition is controlled in Indonesia by the Majelis Ulama Indonesia (MUI - The Indonesian Council of Ulama).

MUI is a Muslim scholars' organisation that provides guidance to Muslims. Its halal certification branch approves halal certifiers in 23 countries. Only six of the AGAHP organisations in Australia are approved by MUI to certify Australian exports going to Indonesia.

In late 2014, the Indonesian government introduced new legislation to ensure all products sold in Indonesia are halal certified, with the Government taking responsibility for administering the halal product guarantee via a new agency, which then submits its results to the MUI.

The Jakarta Post reported that United Development Party politician Hasrul Azwar said that once the government controlled the halal certification process it would not only reap more revenue for the state but also could help curb extortionate practices.

"We plan to break down the components of costs involved in the issuance of each certificate to prevent businesses from being charged illegal levies," the paper quoted Hasrul saying.

In February 2014 Indonesia's Tempo news magazine published allegations that several Australian halal certification companies had paid bribes to MUI officials to ensure their licence to certify Indonesian export food was maintained.

MUI denied the allegations foreign companies had been extorted, saying companies were only asked to pay travel expenses for auditors.

Further afield

For Australian food exported to Saudi Arabia, the Muslim World League, based in Saudi Arabia, is responsible for deciding which companies are permitted to certify halal food for their market.

Amjad Mehboob from the Australian Federation of Islamic Councils Inc (AFIC), now known as Muslims Australia, one of six Australian organisations authorised to certify halal food for the Saudi Arabian market, said AFIC had been certifying for the Saudi Arabian market since the 1960s.

He says it does not pay a fee to the Muslim World League for this recognition.

Saad Al-Shumaimry, director of the Muslim World League for Australia and New Zealand told Fact Check that his organisation did not charge local certification companies fees for endorsing their halal certification status.

Gaafar Mohammed, a senior auditor and meat inspector with the Islamic Co-ordinating Council of Victoria (ICCV) told Fact Check the company did not pay any fees to overseas organisations for their certification recognition.

No disclosure required

None of the companies or organisations that certify halal meat in Australia are public companies, so they are not required to publicly report what they earn from halal certification.

According to the Australian Charities and Not-for-profits Commission register, the Supreme Islamic Council of Halal Meat in Australia Inc (SICHMA) is a large charity with revenue over $1 million, but no financial reports are available on what the actual revenue is, or how much comes from halal certification.

The Australian Federation of Islamic Councils Inc (AFIC) is a registered charity, dedicated to promoting halal food and the institution of halal. Its financial statements show it earned an income of $2.8 million in 2012, of which $647,722 came from halal certification fees, after expenses.

Halal certification and terrorism

Financing terrorism is a criminal offence in Australia, with a penalty of life imprisonment.

Fact Check has also produced a fact file on how authorities monitor the financing of terrorism.

A spokesman for the Australian Transaction Reports and Analysis Centre (AUSTRAC) - the government body that monitors money laundering and terrorism - told Fact Check that it had no information to indicate there are links to terrorism financing from halal certification fees.

The Australian Crime Commission issued a statement in November 2014 saying its taskforce with AUSTRAC and the AFP had identified links between organised crime and terrorism funding.

"However, the Australian Crime Commission is not aware of any direct links between the legitimate halal certification industry and money laundering or the financing of terrorist groups," said the commission's chief executive Chris Dawson.

We do not in any way endorse or support or want to be associated with terrorism.

Muhammad Khan, CEO Halal Australia

Greg Fealy, from the ANU's College of Asia and the Pacific, said there is no evidence whatsoever that the MUI is involved in funding terrorism.

Similarly, Fact Check could find no evidence that Australian halal certification money goes to Indonesian organisations to fund terrorism.

The MUI released a strongly worded statement last year condemning terrorist group ISIS.

Denials by Australian authorities were put to Ms Hanson in her Today interview on April 5.

She replied: "A journalist's life was threatened in France when he tried to associate it with the Muslim Brotherhood." 

During the Queensland election, when reporters asked Ms Hanson about evidence to show Australian halal certification money supported terrorism, she said: "ASIO has picked up that this money has been funded through an organisation to fund Syria and the terrorism there."

An ASIO spokeswoman told Fact Check that it does not comment on specific operational matters.

"Neither the Director-General of Security nor ASIO has made any public comment suggesting halal certification profits are being used to fund terrorism," she said.

So, where does the money go?

Fact Check asked several Australian organisations where the money they earn from halal certification is spent.

Muhammad Khan, CEO of Halal Australia, said profits did not go towards supporting any terrorist activities.

"We do not fund anything like that, we do not in any way endorse or support or want to be associated with terrorism," he said.

Dr Kahn said Halal Australia donates some of its profits to Islamic schools and mosques as part of its broader community engagement program, which includes donations to children's hospitals and the Cancer Council Australia.

"We are mindful of responsibility to the poor and destitute in the community... here as well as in overseas countries [and we donate] through the proper channels, for example Muslim Aid, Islamic Relief, they are all registered non-goverment organisations internationally," he said.

The Islamic Co-ordinating Council of Victoria (ICCV), a private company, claims to be "the major Islamic organisation responsible for the certification, monitoring, and supervision of Halal food exports from Australia".

Gaafar Mohammed says ICCV is a community-based organisation that is partnered with 11 Australian mosques.

"We don't fund the mosques, but we take care of their expenses, like electricity, water, things like that," he said.

"The Australian Muslim community are getting the benefit of the certifications. All money from halal services goes to the community."

Money predominantly for Australian programs

The Tempo magazine report last year said that the ICCV jointly owns an Islamic boarding school in West Java with MUI.

Mr Mohammed says ICCV does not jointly own the Islamic boarding school but it did assist with building it.

He says that ICCV does not fund any organisations in Indonesia, or anywhere else in the world.

"ICCV is an Australian organisation and it's got no links whatsoever with any organisations overseas," he said.

SICHMA supports Islamic Centres and mosques and funds youth education and mentoring programs, according to its website. 

Muslims Australia (AFIC), the peak national body representing Islam and Muslims, administers at least eight Islamic schools around Australia.

It also sponsors Islamic lectures, youth and student activities, makes provision for imams and contributes to the building of mosques and other infrastructure for member societies.

Its financial report for 2012 shows it donated $150,000, part of which funded an imam's salary, and financially supported five Islamic colleges around Australia.

The verdict

The value of the Australian halal certification industry can't be quantified and Ms Hanson's estimate of $3 trillion conflates the value of the global food market with the value of the halal certification market. While the proceeds of halal certification do fund Islamic organisations, Fact Check could find no evidence that this money has ever flowed to terrorist groups.

Ms Hanson's claim doesn't check out.

Source:

ABC News Australia