Shariah and BLOM Bank

In the case of Investment Dar Co KSCC v Blom Developments Bank Sal, the Investment Dar (TID) was an investment company registered in Kuwait and the Blom Development Bank (BDB) was a bank incorporated in Lebanon. A wakalah investment agreement was entered into between the two parties governed by English law. The agreement provided that Blom deposit a certain amount of money with TID, appointing TID as its wakil (agent) to manage the money as an investment. When TID defaulted on payments under the wakalah agreement, BDB sued TID in the High Court of England and applied for summary judgment on the grounds of default in payment (claim in contract) and the deposits held in trust (claim in equity). The master found that there was an arguable defence to the contractual claim, but not to the trust claim due to a misunderstanding of Shariah and the application of common law to an Islamic finance transaction.

TID raised the defence of ultra vires. TID argued that the wakalah agreement, which was approved by its own Shariah board, did not comply with the Shariah and was therefore void and against TID's constitutional documents. Although within the wakalah arrangement some issues of Shariah non-compliancy arose, since the contract was approved by the TID Shariah Board and constituted a binding contract in both common and Islamic law with valid offer and acceptance. Thus, TID should have been held to the terms of the contract.

In terms of Islamic law, the Hanafis stipulated a valid offer and acceptance as the cornerstones of the agency contract. While the Hanafis restricted the contracts cornerstones to offer and acceptance or actions implying acceptance, the other jurists enumerated four cornerstones: (i) principal, (ii) agent, (iii) object of the agency contract, and (iv) the contract language. If the compensation is a ji'alah, whereby the task and the time period are not explicitly stated in the contract, then the majority of jurists agree that the contract is non-binding on the parties.

However, the Malikis ruled that the contract was, in this case, binding on the principal once the agent begins working. If the compensation renders the contract an ijarah, then the Hanafis and most Malikis ruled that the agency contract is thus binding. In contrast, the Shafis and Hanbalis ruled that the contract was still not binding in this case. In this instance, according to the Hanafis, the contract had valid offer and acceptance with principal and an agent consenting to the terms of the contract and initiating investment activity in the form of a wakalah. In addition, the wakalah contract appears to be an ijarah and thus valid and binding according to the Hanafis and Malikis.

According to the AAOIFI Shariah standard No. 23 (4/3) and as occurred in this case, "when agency is paid, involves the rights of others, when the agent commences tasks that cannot be discontinued or phased out without causing injury to him or to the principal, and/or when the principal or the agent undertakes not to revoke the contract within a certain period, it falls under the Shariah rulings on Ijarah and is binding." The judge ignored the valid and binding contract and the original contractual intent of the parties, applied western trust law to the wakalah arrangement, and unjustly ruled that TID was only liable to pay Blom the principle amount.

In the concerned wakalah arrangement, at the end of every wakalah period, TID was obligated to pay five percent profit to Blom . The issue arose when TID defaulted on payments of Blom 's principal and the agreed profits. Blom claimed that TID should pay it the principal deposits plus the contractually agreed five percent profit. However, TID argued that the agreement was not Shariah-compliant, being an agreement for deposit taking with interest, and therefore null, being ultra vires and beyond its legal capacity to conform. The Judge concurred and stated, "I agree...that where one finds, as one does in this master wakalah contract, a device to enable...the payment of interest under another guise, that is at least an indirect practice of a non-Shariah compliant activity." Due to constraints faced by the Islamic banking industry in terms of risk management, the reality of operating in a conventional system, and the need to compete, it is difficult to adhere to true Shariah banking at this moment in time[SO1] . It may be argued that in fact all Islamic banking products are devices to enable the payment of interest in another guise.

According to the AAOIFI Shariah Standard No. 5(2/2/2) on Guarantees, "it is not permissible to combine agency and personal guarantees in one contract at the same time, because such a combination conflicts with the nature of these contracts. In addition, a guarantee given by a party acting as an agent in respect of an investment, turns the transaction into an interest-based loan since the capital of the investment is guaranteed in addition to the proceeds of the investment (i.e. as though the investment agent had taken a loan and repaid it with an additional sum, which is tantamount to riba)." In this case, TID, as agent, also guaranteed Blom a five percent return. However, even if the wakalah agreement in question really was a loan with interest in disguise or a similar contraption, due to the fact that this agreement was approved by the TID Shariah board, TID should be held to the terms of the contract. TID should not be allowed to suddenly claim that the transaction is non-Shariah compliant in order to evade its contractual obligations to Blom Bank.

According to records, Jurists agree that an agent's possession is one of trust, analogous to deposits and similar to possessions. This ruling follows from the fact that the agent would possess goods as a legal representative of the principal (who is the owner). Thus, his possession is similar (but not the same) to that of a depository, following its rules for trust and guarantee. Under Shariah, TID was holding the five percent profit on trust for Blom as agent for principal even if the guarantee combined with agency is thought by some to have turned the wakalah into a deposit taking with interest or to have simulated an interest-bearing loan.

Although under Shariah, TID was technically only supposed to receive an agency fee, in this wakalaharrangement, TID was contractually to receive an agency fee plus all return above five percent, thus bearing risk of loss. In a proper wakalah arrangement, the principal bears all risk of loss and profit, while the agent only receives an agency fee. According to the AAOIFI Shariah Standard No. 21(4/2/c), "the amount payable as remuneration for agency should be known, whether in lump sum or as a share of a specific amount of income. It may also be defined in terms of an amount of income to be known in the future, as when remuneration is linked to an indicator that may be quoted at the beginnings of different intervals of time. However, it is not permissible to leave remuneration for agency undetermined and allow the agent to take an unspecified share from the entitlements of principal." In this arrangement, the agent was to take an unspecified share from the entitlements of the principal, being any amount of return above five percent. These Shariah issues were totally ignored by the judge. In this transaction, the judge misapplied Shariah law, ignored the reality of the Islamic finance and banking industry, and then judged the contracts in relation to Western trust law, unfairly ruling that Blom was only entitled to the principal amount.

The judge ordered an interim payment to be paid to Blom based on the fact that the contract was null and void (no trust) and that the transaction was ultra vires (non-Shariah compliant). The judge should have ruled thatBlom was entitled to the deposit amount plus any profit made up to a limit of five percent (if profit was made) rather than just the deposit amount. TID ultimately withdrew the case.

About: Camille Paldi is associate with Alhuda-CIBE, She is a legal expert and founder of FAAIF Limited as well as the popular ilovetheuae.com. In addition to being a qualified Islamic finance specialist with a Masters Degree in Islamic finance from Durham University (UK), Camille is also a lawyer in four countries and nine jurisdictions around the world and has received legal training in common, civil, and Shariah law in six countries spanning five continents.

Source: Zawya

Pakistan all set to capture international halal food products market

ISLAMABAD: The Ministry of Science and Technology (MoST) is all set to take steps to foster halal industry of Pakistan and to capture the international Halal products market worth US$ 3 trillion.

An inter-ministerial meeting would soon be convened in this regard, to expedite the progress on Halal food and making the industry compliant to international standards.

“There is strong need of developing standards and enacting a law to advertise our Halal products, and will boost our export especially in Middle East and Europe”, a Ministry official told APP.

He said Pakistan needs Halal professionals because globalization of food trade and increased consumer awareness regarding food safety standards contribute towards new demands for halal, healthy and hygienic food.

“We possess all imperative elements for Halal products’ production and have to streamline them at par, the demand of the target community”, he added.

He said creation of Punjab Halal Development Agency (PHDA) is a step toward making Pakistan, Halal hub by opening new vistas for entering the global Halal market while serving the domestic consumer market.

The demand for healthy and safe agro-livestock food products is increasing rapidly with increasing population growth rate and socio-economic conditions.

This will also open up new economic opportunities and employment for the youth and traders. PHDA, being a leading entity of government of the Punjab is established to prescribe standards and processes for Halal Certification of food and non-food sector in line with research and advanced laboratory testing facilities.

Official said the Ministry of S&T will promote Halal Industry of Pakistan worldwide by maintaining International standards, adding Halal Standards for Livestock, Beverages, By-products, Cosmetics and other edibles will also be introduced, which will build trust on Pakistani products and enhance export volume.

Source: Aaj TV

British Muslims develop appetite for halal turkey

Covered in blood and Urdu script, the traditional halal butcher’s shop has catered to generations of Britain’s Muslims – serving up a platter of chicken, lamb and beef to mostly foreign-born customers.

But in a sign of changing consumer habits, they have taken to selling halal turkeys, as growing numbers of practising Muslims gobble up roast turkeys for Christmas dinner on the Christian feast day.

Last December, the Halal Monitoring Council certified 5,500 turkeys slaughtered in UK abattoirs. In 2011, they certified none. Last week alone, the HMC certified 1,500 turkeys.

Demand has taken many suppliers by surprise.

“I was shocked there was a market at all,” said Paul Kelly, managing director of Kelly Bronze Turkeys.

Ben Bayer, an executive at wholesaler DB Food, says there is “huge demand” for halal turkeys, but they are unable to meet it, as the UK’s biggest halal assurance body, the Halal Food Authority, does not yet certify any turkeys as halal.

Muslim butchers instead mostly import halal turkeys from Ireland and Italy. These are now even available at Smithfield Market in London.

A Financial Times survey of 20 halal butchers based in London, Lancashire and Essex found that over half sold halal turkeys in December – some for the first time this year.

JR Butchers in Tooting says it is on track to sell 2,500 turkeys this December – a 4 per cent rise on last year.

It is relatively recently that turkeys have waddled into the UK’s £2.6bn halal meat market, as estimated by the World Halal Forum, which is growing exponentially as the Muslim population grows.

Research by Eblex, the meat industry body, shows that Muslims constitute less than 4 per cent of Britons, yet account for 12-15 per cent of British meat consumption.

Turkeys are representative of the flush nature of an expanding market, which Javed Rashid, a partner at JR Butchers, describes as “the high end of halal”. It encompasses increasing Muslim demand for halal geese and halal free-range products.

“These are home-grown Muslims with a higher disposable income than their parents’ generation and are more at home with British customs – without compromising their faith,” said Noman Khawaja, founder of the Halal Food Festival who uses the term “haloodie” to describe these new halal “foodies”.

Businesses are increasingly catering to this market. Mr Rashid aims to give his customers “an education in meat, which old-fashioned halal butchers are unable to provide – they lack the product knowledge”.

Fast food outlets have long served halal meat in areas with a high Muslim population. Now more upmarket restaurants, from the PizzaExpress chain to China Tang in Mayfair, have halal menus, too.

John Man, senior manager at China Tang, believes that it is important the luxury restaurant “reflects its customer profile”, adding that “the quality of halal meat is always good, when other meat sometimes fails to meet our standards”.

The increasing diversity of the UK’s halal meat market reflects a bigger, worldwide trend. Last week, a Norwegian supplier of Scandinavian game meat unveiled the world’s first halal reindeer – enabling Norway’s Muslims to taste the traditional yuletide meat for the first time.

Source: www.ft.com

Islamic finance has taken the stage in 2013

It was the year that the Islamic economy moved from vague conceptual status, an item on Dubai’s “wish list”, to being a central part of the UAE’s economic strategy.

The tone was set early on, in January, when Sheikh Mohammed bin Rashid, Vice President of the UAE and Ruler of Dubai, set out the emirate’s aim to become the hub of global Sharia-compliant business within five years.

It was an ambitious plan. Dubai is already a leading financial centre for the issue of sukuk (Sharia-compliant bonds) but Sheikh Mohammed’s vision went far wider than just the sukuk market.

Sami Al Qamzi, the director general of the Dubai Department of Economic Development and one of the lieutenants entrusted with implementing the Ruler’s strategy, said the aim of the initiative was to create a global capital of Islamic industry, economy and finance.

“The plans to create an Islamic economic centre will provide access to a global market for Islamic products valued at more than US$2 trillion.”

Halal food production, pharmaceuticals and cosmetics, tourism and travel, and all other aspects of Islamic lifestyle were included in the plan, as well as the essential infrastructure of standardisation and certification of halal products.

Although nobody doubts the potential market provided by the world’s 1.3 billion Muslims, it is widely spread both geographically and sectorally. Dubai’s strategy was the first time one country had set out to be the world capital of the Islamic economy.

Dubai faces serious competition. Kuala Lumpar has been the driving force in Sharia-compliant financial business, having built up its resources in sukuk and other forms of Islamic finance over the past two decades.

London, too, was keen to augment its position as the leading financial market in the European time zone by becoming the global centre for sukuk listing and trading, a lucrative part of the Islamic financial market.

Other centres, like Dublin, Luxembourg, Indonesia and Bahrain also had plans to develop their Islamic economic capabilities. To make Dubai the centre of the Islamic business world would be a challenging task. The plan was immediately backed by leaders of the Dubai business and policymaking elite. In the Dubai International Financial Centre, the Nasdaq Dubai stock market announced it was considering a trading platform for sukuk, hoping to take away some of London’s lucrative trade.

Sultan Ahmed bin Sulayem, the chairman of Dubai World, applauded the move. “Dubai is pioneering; this is another example of how it does things before anyone else in the world,” he said.

The Dubai Multi Commodites Centre advanced plans to extend Sharia-compliant business in commodities and metals trading.

Banks beefed up their Islamic financial capabilities by hiring more experts on Sharia-compliant business, making it a growth market in the emirate’s financial scene and one of the forces behind Dubai’s recovery.

For most of the summer, the task force set up by Sheikh Mohammed was working hard behind the scenes to produce a practical strategy for the implementation of the grand plan.

By October, a master plan was in place. Seven separate strategic goals, each aiming to make Dubai a global leader in one aspect of the Islamic economy, had been identified: finance; the halal food industry; family-friendly tourism; the digital economy; fashion, arts and design; economic education; and standards and certification.

“The continued developments and changes in the global economy increase the need to constantly diversify the structure of our national economy,” said Sheikh Mohammed. “Our aim from all economic initiatives we launch is to improve the quality of life and provide opportunities that ensure a prosperous future for coming generations.”

And in a typical show of confidence that the emirate could achieve its ambition, he said that the time scale would be reduced. The aim was to make Dubai the capital of Islamic economy in three, not five years.

Early steps to be taken in 2014 include the establishment of an Islamic governance centre in Dubai, and an international laboratory for the certification and accreditation of halal products is also planned for early next year. Halal food and other products form an estimated US$3.5 billion global market.

Two other initiatives are also scheduled for the first part of next year: legislation to regulate the production of halal products locally and globally, and an international endowment authority to spread the culture of waqf, or Islamic charitable endowment.

At October’s World Islamic Economic Forum (WIEF) in London, held for the first time outside the Islamic world, the competitive pace was stepped up when Britain announced its plan to be the first non-Muslim country to issue a sovereign sukuk. But Dubai managed to steal London’s thunder when, after months of careful negotiations with the Malaysia-based WIEF, it was announced that the 2014 forum would be held in Dubai.

The final showpiece of the year was the Global Islamic Economy Summit held in Dubai in November, organised by the Dubai Chamber of Commerce and the information group Thomson-Reuters. Some 3,000 leaders of global Islamic business gathered to hear Dubai’s plans, and to give their general endorsement of the strategy.

The prize for Dubai had got bigger. A new study put the overall potential value of Islamic business at $6.7 trillion by 2018, more than the value of any national economy in the world except the United States and China.

Source: www.thenational.ae

Indonesia aims for insurance, takaful legislation in 2014

Insurers in Indonesia, Southeast Asia's largest economy, will have to wait until at least next year for a new law that will require the spin-off of their sharia compliant units, an official at the country's financial regulator told Reuters.

The move could reshape Indonesia's Islamic insurance, or takaful, market by spurring mergers as firms try to meet capital requirements for their full-fledged Islamic units.

A draft law is now with parliament but other legislative priorities means it won't be enacted this year as previously anticipated, said Alis Subiyantoro, head of the sharia insurance subdivision at the country's financial services authority.

"The draft is still in discussion. The government asked to look at other legislation so it was postponed until next year."

"It covers all areas - licensing, market conduct, corporate governance, consumer protection - for both takaful and non-takaful firms," he said.

Assets in Indonesian takaful firms grew 42.8 percent to 13.1 trillion rupiah ($1.1 billion) as of December 2012 from 9.15 trillion rupiah a year earlier, data from the regulator showed, representing 2.3 percent of total industry assets.

The law would give three years for insurers to comply with requirements to spin-off their Islamic units, although that timeframe is also under discussion, Subiyantoro added.

Minimum capital requirements for full-fledged takaful firms would be set at 50 billion rupiah, compared with 100 billion rupiah for conventional insurers, which could prompt smaller operations to either merge or close.

WINDOWS

Indonesia's takaful market is dominated by windows: there were five full-fledged takaful firms versus 37 sharia units of conventional insurers, as of December 2012.

Takaful windows enable firms to offer sharia-compliant and conventional products side by side, provided client money is segregated, but the practice is not widespread as in commercial banking where Islamic windows are commonplace.

Takaful is based on the concept of mutuality; the takaful company oversees a pool of funds contributed by all policy holders, but does not necessarily bear risk itself.

Indonesia's takaful sector has attracted global firms keen to capitalize on rapid economic growth in the world's most populous Muslim country, a market of 240 million consumers.

Firms offering takaful products include Europe's top insurer Allianz, Britain's biggest insurer Prudential, Toronto-based Manulife Financial Corporation, and French insurer AXA.

Passing Indonesia's insurance law would close the last market that allows takaful windows to operate, helping develop the country's nascent Islamic finance market which still lags behind neighbor Malaysia.

The only other regulator that has allowed takaful windows is Pakistan, which passed a law in July of last year to that effect but which has been challenged in court by local takaful firms. The law has been in legal limbo ever since.

Source: Reuters

Halal Research Council and KPK Agriculture University Signed Agreement

A strategic partnership agreement signing ceremony between Halal Research Council (HRC) and KP Agriculture University was held on Thursday in which the experts from food, nutrition, livestock and other Industries were participated. According to the agreement, Halal Research Council and KP Agriculture University will provide joint consultation, training, research and technical assistance to each other for the promotion of Halal industry especially in Khyber Pakhtunkhwa province. 

The strategic partnership agreement was signed by the Chief Executive Officer of Halal Research Council Muhummad Zubair Mughal, Professor Dr Khan Bahadur Marwart Vice Chancellor of Khyber Pakhtunkhwa Agriculture University and Professor Dr M Subhan Qureshi-Dean Faculty of Veterinary Sciences. 

As per the agreement, Halal Research Council will provide international linkages and Halal certification services to Khyber Pakhtunkhwa Agriculture University in Khyber Pakhtunkhwa's Halal related industries. Professor Dr Khan Bahadur Marwart Vice-Chancellor of Khyber Pakhtunkhwa Agriculture University, addressing the agreement signing ceremony, said that nowadays distinction between Halal and Haram has become a big issue and organisations like Halal Research Council has smoothen this issue for general public through its expertise. 

He further added that due to this agreement between Halal Research Council and KPK Agriculture University, Halal Industry in Pakistan and particularly in Khyber Pakhtunkhwa will progress rapidly. Professor Dr M Subhan Qureshi Dean Faculty of Veterinary Sciences said that Khyber Pakhtunkhwa has a specialty that livestock is in abundance here. Khyber Pakhtunkhwa is a mountainous area, hence, meat is available in excess here relatively to dairy; and substantial amount of profit can be earned by exporting meat in the international market with Halal logo. 

Muhummad Zubair Mughal the Executive Officer of Halal Research Council said that the Halal Research Council's agreement with KPK Agriculture University will be a milestone in the development of Halal Industry, due to which educational and training efforts along with trade and advancement in Halal sector can be further strengthened. He said that Pakistan's Shariah values are acknowledged all over the world. If we export Halal meat, poultry, dairy, confectionery, spices and other food products from Pakistan to international market, then they will be highly recognised due to our Shariah values. 

Channeling Halal food potential

AnalysIs - Halal industry is a fast emerging business in the world, attracting both Muslims and non Muslims, especially non Muslims due to realising the importance of halal food. As expert have opined that they are safer, hygienic, nutritious, having high quality and reliability. Halal food is consumed not only by 1.5 billion Muslims around the world, but also by at least 500 million non-Muslims, which shows that there is a big scope to enter in the halal food industry, to tap the world market. It is estimated that the annual halal food and non food products market is about $2.1 trillion of which about $80 billion is being exploited, which is 5 per cent of total trade of agri-food products. However, halal food trade may have a share of 20 per cent of world trade in food products in near future. While the market for about 1.4 billion Muslims already exists, the demand for halal products is now on the rise across the globe.
Due to lack of awareness about halal products in Pakistan, we hardly have any share in the global market of $600 billion. The Thai consul general in Pakistan said over 1,800 factories are producing 57,000 different halal food products for exports after acquiring Halal Certification from authorities with advanced research facilities. There is great scope of setting joint venture in halal food sector between Pakistan and Thailand. He assured all possible help in setting up joint ventures with Pakistani companies.

Chile a hub for Halal Food

Chile's ambassador in Malaysia said the number of halal certified Chilean companies had grown from 25 to 45 within the first quarter of this year. It was claimed that the country can compete with any country as its halal products are of high quality. Chile had exported many of its halal meat products to other Islamic countries including the Middle East and Muslim African countries. 

Halal units in China

In Ningxia, China, Muslims account for around 38 per cent of the province’s 6.3 million residents. The province recently announced that it had developed a halal industry to accommodate not just the needs of Chinese Muslims but also Muslims in other countries.
Ningxia’s halal food commission said that the province had more than 10,000 factories and restaurants that were certified halal products. The region’s halal industry, which is supported by a high tech laboratory, 15 experts and 300 staffers, was currently worth up to 50 million RMB.

Engro expanding Halal Trade

Engro intends to acquire Al Safa Halal unit. It will target the existing North American market, Canada and USA. Pakistan and Malaysia have decided to utilise various options available under the Free Trade Agreement (FTA) to boost economic relations and broaden the scope of bilateral trade, signed in January 2008. Pakistan Malaysia Business Forum is exploring opportunities for joint ventures in sectors such as agriculture and halal industry which offered better returns and greater scope for growth given a growing demand for quality food and halal products in the region. 
Zubair Motiwala, Chairman Sindh Board of Investment (SBI) said that Pakistan is going to start issuing halal certification by March, 2012.
He said the SBI in collaboration with Halal Industry Development Corporation, Malaysia, is working to develop halal industry and is committed to effectively implement the provisions of the MoU signed between the two parties on Dec 1, 2010, in Kuala Lumpur, for development of Halal sector in Pakistan. Pakistan can benefit from the halal standard, advance scientific knowledge and research experience of Malaysia for developing and promotion of its halal products industry. Pakistan is the sixth largest milk producer, eighth in meat and tenth in poultry had a negligible share in the world halal food and services market. 
However, Pakistan is trying to develop halal services such as finance and banking and could easily develop other products in sectors like pharmaceuticals, insurance, etc. 
The experts say that the important factors are the standardisation and certifications of halal brands and logos which would make Pakistan hub of halal trade for the world and for the region, due to the proximity of Middle East and central Asian countries. 
Moreover, halal food should be made tasty and pleasant with no chemicals and nice looking to attract consumers the world over and to compete haram food that is being made attractive for consumers to capture markets.

Export potential

Pakistan can earn huge amount by investing into halal meat and exporting it after meeting local demand. European market size of halal food is about $66 billion while France having the largest share of $17 billion alone, stated by the Vice Chancellor University of Agriculture, Faisalabad. He also said that only in UK the halal meat sale is amounting to $600 million annually while the American Muslims spend $13 billion on halal food per annum.
The livestock contributed 55.1 per cent to the agriculture value added and 11.5 per cent to GDP during 2010-11 while its share last year was 53.2 per cent of the agriculture value added and 11.4 per cent to national GDP during 2009-10.
In the current scenario of devolution under 18th Amendment, the responsibility of livestock development has been shifted to provinces and federal government will play facilitating role in national interest. The future plan for livestock sector is to meet MTDF targets for meat, 5.0 per cent and milk 8.0 per cent production through shifting from subsistence livestock farming to market oriented and commercial farming with a focus on entire market chain. The future plan also includes entering into global halal food trade market. 
Zubair Motiwala, Chairman Sindh Board of Investment (SBI) said that the Pakistan is going to start issuing Halal certification by March, 2012.

Halal food certification system

The ministry is planning to create a halal food certification system in Pakistan. The system would help the country earn at least $600 million by exporting of halal products. Presently, there is neither halal infrastructure, nor a qualified certifier and whatever is to be exported in the name of halal has to be certified by a foreign inspection body, mainly Malaysian companies.
On August 18, a MoU was signed between Halal Research Council and Faisalabad Industrial Estate Development (FIEDMC) for the establishment of M-3 Halal Park at the estate. It will be Pakistan’s first Halal park and from here Halal products can conveniently be exported. Such parks already exist in Malaysia, Yemen, Britain and Russia.
A state-of-the-art facility is being set up by PAMCO costing $300 million with the cooperation of Iran, M-3 Halal Industrial Park at Faisalabad. A Halal Laboratory would also be set up at University of Veterinary and Animal Sciences (UVAS), Lahore. 
An industrial park is proposed to be set up in Karachi to facilitate growth of an export oriented halal business. The park will be a cluster of halal business industries to be built in a special zone where they will be provided infrastructure and halal related support services. For this purpose, the SBI has signed a MoU with the Halal Industry Corporation (HDC), Malaysia in December, 2010 at Kaula Lumpur.
The ministry of commerce imposed a ban on export of meat and live animals in July 2011 for three months to bring down the prices of beef and mutton which were becoming unaffordable for the common man. Although it was said that the purpose of the ban is to provide relief to the consumers but officials said that the decision was taken to meet the demand of Pakistan Tanneries Association (PTA) whose members were facing the problem of shortage of hides and skins and high prices of raw materials, due to export of animals. They said exports of leather products fetch much more foreign exchange than those of live animals.

Export of meat products
According to the Federal Bureau of Statistics, Pakistan’s export of meat and meat products touched the figure of $153.8 million in 2010-11, showing an increase of $99.3 million over the previous year. The official statistics indicated that 95,523 live animals were exported during 2010-11, July-March. About 153,543 animals were exported in the previous fiscal year which included 48,680 cattle, 50,000 buffalos, 54,716 goats and 147 camels. These were exported to Arab countries, Central Asian states and Afghanistan. There is no clash of interest between the two industries. The ban should have been restricted to animals only, sparing the meat. The export of tanned leather increased from $341.8 million a year ago to $462.3 million in 2010-2011 and that of leather products rose from $458.6 million to $540.5 million.
Malaysia’s Department of Islamic Development has approved the Islamic Foundation Bangladesh (IFB) as a Halal certification body and, Bangladesh will soon start exporting halal food and other products, competing with Pakistan in this sector, besides textiles. The IFB has been included in the list of halal certification bodies worldwide, i.e. Bangladesh would take its share from the $660 billion global market for halal food.

Emerging global market
The emerging global halal food market has plenty of opportunities for further growth. Thus, the market represents a strong economic opportunity for Pakistan and Thailand. The Thai government has lent the industry valuable support in developing a world class halal logistics system. Thailand is currently the world's sixth largest exporter of halal food, accounting for $5 billion in international trade and providing food to 1.8 billion Muslims in over 157 countries. As a large Islamic nation with strong agricultural base and good relations with Muslim countries Pakistan may be a leading player in halal food trade. 
Punjab Industrial Estate Development and Management Company (PIEDMC) and the Government of Malaysia have signed a MoU for the promotion of halal product projects, which will help Pakistan in boosting halal products’ exports. Pakistan is among the top five milk and livestock producing countries in the world. Therefore, Pakistani businessmen can avail this opportunity. PIEDMC Chairman S M Tanveer pointed out that the dairy and livestock sectors currently performs well below its true potential. Pakistani halal food, which also includes poultry products, has vast export potential in European and other Western countries. The exports can be enhanced manifold in future, provided the sector receives official recognition. The private sector exporters of halal food said through adopting modern techniques and bettering sanitary certification procedures, the halal food exports could fetch more than $100 million in next two years for Pakistan, besides other products. - See more at: 

Source: 

Pakistan Today

Tunisia has big potential for Islamic Finance: Zubair Mughal

Tunisia would be the global hub of Islamic Finance for French speaking countries

Zubair Mughal, CEO, AlHuda CIBE Speaking at International conference "The Enterprise and Finance", which is jointly organized by World Bank, IMF, IFC & European Bank of Reconstruction and Development at Sousse – Tunisia

Muhammad Zubair Mughal, being the guest of honor, during his address he stated that international financial crisis can be addressed in a better way through Islamic Finance and such financial crisis could have not been happened if Islamic financial system was followed and implemented at that time, he said there are about 2000 Islamic Financial Institutions working globally as Islamic Banks, Takaful ( Islamic Insurance), Sukuk ( Islamic Bonds), Islamic Fund and Islamic Microfinance institutions etc in more than 100 countries and fortunately no Islamic Financial institution was effected by such global financial crisis which ensures the strength and rationality behind the Islamic financial system. He also added that international institutions such as Islamic Development Bank (IDB), Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI), Islamic Financial Services Board (IFSB) and International Islamic Liquidity Management (IILM) are dedicatedly working for Islamic finance around the globe which will further promote and strengthen the Islamic finance in future globally. He, responding to a question related to the relationship between religion and Islamic finance in question answer session, said that Islamic banking and finance is a name of a system not religion so all other religions can get benefit from it and that is why Islamic banking and finance is growing in the western world while non Muslims are utilizing the Islamic financial products, considerably, to fulfill their business, personal and financial needs as in only America which has more than 20 Islamic financial institutions are working, which are actively providing the Islamic financial services to fulfill the financial needs of Muslims and non-Muslims equally.

During his stay in Tunisia, he met with Dr. Amel Amri, President – Tunisian Association for Islamic Finance (TAIF), Dr. Raza, President – Islamic Economic Association Tunisia and heads of some other Islamic financial institutions. He said that Tunisia has a good recognition in Islamic financial industry having 2 full-fledged Islamic banks, Takaful companies, universities with having Islamic finance program, Sukuk Laws and some other similar institutions which are indicating the best future of Islamic finance in Tunisia but he, realizing the need of Islamic microfinance, said that Islamic microfinance is missing component of Islamic finance in Tunisia while socioeconomic development and poverty reduction can be done in better way through Islamic microfinance in Tunisia.

Global Halal Meat Market volume reached up to $ 300 billion: Zubair Mughal

Brazil, America, Australia and India have substantial market share in Halal meat Industry.

(Lahore) Halal meat market is growing rapidly throughout the world and its demand is increasing day by bay, Pakistan ranked 18th in the production of Halal Meat Market and its volume is only 2.9 % of the global Halal meat production which is very low, These views were expressed by Muhammad Zubair Mughal, Chief Executive Officer-Halal Research Council, he mentioned that Pakistan can play pivotal role in this growing market because Pakistan have more than 160 million quality live stock including 71 million Cattles & Buffalos and 89 million goats & sheep’s. He pointed out that there is no Muslim country is included in the list of first ten Halal meat exporters, although Pakistan, Sudan and other Muslim countries have big potential of exporting Halal meat globally. He said Halal meat is not only the name of meat but more than 26 Halal industries are also based on bi-products of Halal meat e.g. Casings, Bone crashing, Gelatin, Sausages, leather and other industries are associated with it. He further explained that to strengthen the Global Halal meat industry, Halal Research Council is going to organize an international workshop on Halal Meat which will be scheduled on 26th August, 2013 in Dubai – U.A.E. In which renowned expert, Prof. Dr. Javaid Awan - Agriculture University Faisalabad, Nasib Ahmad Saifi - Chief Executive Officer- Anis Associates Pvt. Ltd and other International speakers will limelight the need and importance of Halal Meat, Fundamentals of Halal certification, Animal welfare and stunning, Impact of Halal slaughtering on meat quality, Pre- and post-slaughtering procedures, Global market and demand for Halal meat, Strategies to increase the share of Halal meat in global meat market, Livestock management for Halal meat, Slaughterhouse automation - machinery, tools and training and Utilization of halal meat in the production of processed and semi-processed food items. The main aim of this Int’l workshop is to promote the trade and importance of Halal Meat at International level. Halal meat exporters, Veterinary Doctors, Shariah Scholars, food technologists and hotel industry will get benefit through this workshop. Halal Research Council (HRC) is a Pakistan based think tank working for the development of Halal Industry through research, advisory, advocacy, market intelligence & Capacity Building. HRC working globally with the help of 28 International strategic partners which are based in USA, U.K, Kenya, Malaysia, Pakistan, Spain, Germany, India, Bangladesh, Sweden and other countries.

Pakistan a small player in global halal meat market

LAHORE: 

Pakistan is one of those countries in the world where climatic and other conditions support the livestock industry, but this industry lacks modernisation and is still a long way from becoming a leading player in the rapidly growing global halal food market.

In an attempt to give a boost to the industry, the government has made some efforts in the past few years, especially in Punjab, where the Punjab Agriculture and Meat Company (Pamco) has been established. However, it has yet to give desired results.

The private sector has been involved in this industry, but not aggressively because of issues like taxation, freight rates, energy crisis, etc. The industry needs modern and hygienic slaughter houses that can meet international standards for export of chilled or frozen red meat to countries where demand for halal meat is growing.

Pakistan is ranked 19th in terms of meat production with an annual output of 2.2 million tons. In the three-trillion-dollar halal product industry of the world, the meat segment is worth $600 billion. Pakistan’s share in it is only $115 million.

Meat exporters believe that this figure can be tripled with the right policies.

“The industry is in its initial stages in Pakistan, with literally 0% contribution to the global industry, we need relaxation in taxes, less interference from provincial departments and a clear policy to boost the industry,” said Nasib Ahmad Saifi, Chief Executive Officer of Anis Associates, a sister concern of Saifi Group, while talking to The Express Tribune.

The group is one of the largest exporters of meat in Punjab, whose export revenues have crossed $15 million annually.

“Rising tax rates, zero rebate, high freight charges and above all energy crisis are hitting us hard, otherwise our company has the potential to at least triple its export volume,” Saifi said.

He believed that total meat exports of the country could reach $500 million if the government started taking interest in this industry. Citing the example of India, he claimed that the neighbouring country, which is not even an Islamic state, was exporting halal meat worth $23 billion annually just by properly organising the industry.

He highlighted smuggling of live animals to Afghanistan and Iran as another problem that has been hitting the livestock market.

According to Pamco, around 2.5 million live animals worth $1.4 billion are smuggled every year, dealing a damaging blow not only to domestic meat sales, but also to exports.

Saifi stressed that if smuggling was brought under control, the export of red meat would grow and prices would also come down in the country.

This will also provide a boost to the local leather and tannin industry which will have access to high quality hides at lower cost. In fact it has been a long-standing demand of the local leather industry to limit livestock exports and to promote meat exports.

Source: Tribune