Regulatory Impact Assessment (RIA) Functional Food Policy in

Indonesia

Parama Tirta Wulandari Wening Kusuma

, Prakoso Bhairawa Putera

1,3

, Renti Rosyalin Budiman

Amelya Gustina

and Wakhid Yuli Hastanto

Indonesian Institute of Sciences, Sasana Widya Sarwono Lt. 6, Jln. Jend Gatot Subroto No 10,

Jakarta Selatan 12710, Indonesia

The Research and Development Center, Attorney General’s Office of Indonesia,

Jln Sultan Hasanuddin No.1 Kebayoran Baru, Jakarta Selatan, Indonesia

Doctoral Programme of Administrative Sciences, Faculty of Social and Political Science, University of Padjadjaran,

Jln. Bukit Dago Utara No. 25 Bandung, Indonesia

wakh041@gmail.com

Keywords: Regulatory Impact Assessment, Functional Food, Food Policy, Cost Benefit Analysis.

Abstract: Functional Food has been regulated by the Head of The National Agency of Drug and Food Control of

Republic of Indonesia or NADFC/BPOM Number HK 00.05.52.0685 about Provisions on the Principal of

Functional Food Supervision, then revoked with Regulation Number HK.03.1.23.11.11.09909 of 2011

concerning Claim Monitoring in Labels and Processed Food Ads. This regulation does not specifically explain

Functional Food, but contains more macro arrangements in processed food. This regulation is the object of

policy research with Regulatory Impact Assessment (RIA) approached. From several regulations, the problem

and stakeholders needs will be reviewed, including revoking regulations that clearly provide arrangements in

the functional food sector, cost benefit analysis (CBA using AHP Tools) of the policy. The results of the

CBA/AHP analysis for the benefits and costs of the priority policy of Functional Food Regulation in

Indonesia, is to Revoke the Regulation of the Head of BPOM No. 13/2016 with the largest Benefit/Cost (B/C)

value is 1.15, that is, with this result the optimal scenario is due to B / C> 1.

1 INTRODUCTION

Indonesia has population that reaches more than 250

million per year with growth rate of 2% by 2017

included to rank of agricultural countries in the world

which the most prominent sector is agriculture.

Indonesia still focused on staple foods (Kumar, 2015

in Bustanul Arifin, 2016) with predominance of foods

consumed from grains around 60% (Bappenas, 2016).

Lacking in diversification of safe foods inflict in

inadequate availability, access, and local foods

intake.

Functional Food has been regulated by the Head

of The National Agency of Drug and Food Control of

Republic of Indonesia or NADFC/BPOM Number

HK 00.05.52.0685 about Provisions on the Principal

of Functional Food Supervision, then revoked with

Regulation Number HK.03.1.23.11.11.09909 of 2011

about Claim Monitoring in Labels and Processed

Food and Advertisements. The existence of latest

regulation does not specifically explain Functional

Food, but it contains more macro arrangements in

processed food (Putera, et.al, 2019; Gustina, et.al,

2020).

Today, functional food in Indonesia is insufficient

discernible from processed food conditions which

still contain hazardous substances, various products

claim healthy and safe for consumption, however it is

discorded with the written claims.

Regulatory Impact Analysis (RIA) is a tool or

method that can be used to improve the quality of

policies. This method became popular early 2000s,

and widely used in developed countries. RIA consists

of two methods, firstly, analyzing policies or impact

of the existing policies, secondly, to establish new

government regulations. RIA ensures that the

regulations issued have a good motivation and

systematically adequate to appraise negative and

positive effect of regulations that being proposed or

currently running, to evaluate policies in decision

making process and appraising effects from

Kusuma, P., Putera, P., Budiman, R., Gustina, A. and Hastanto, W.

Regulatory Impact Assessment (RIA) Functional Food Policy in Indonesia.

DOI: 10.5220/0009980300002964

In Proceedings of the 16th ASEAN Food Conference (16th AFC 2019) - Outlook and Opportunities of Food Technology and Culinary for Tourism Industry, pages 5-10

ISBN: 978-989-758-467-1

government actions also to convey information to

decision makers. Furthemore, RIA provides a good

solution for benefits and costs issue that possibly

caused by the regulations.

This research aims to study issues and needs for a

regulation in reinforcing food sector, particularly

functional food, to numerate its benefits and costs and

providing alternative solutions of the policy.

2 RESEARCH METHOD

The research method using qualitative approach with

Regulatory Impact Assessment (RIA). RIA is an

analytical tool that helps government to decide

whether a regulation is needed, advantages and

disadvantages of it, and the alternative solutions of

the regulation. RIA can be used as a policy evaluation

tool, a method to assess systematically its negative

and positive effects of regulations that being proposed

on going progress. In this study, researchers used the

Analytical Hierarchy Process (AHP) to analyze costs

and benefits or Cost Benefit Analysis (CBA) as a

stages of RIA.

3 RESULTS AND DISCUSSION

3.1 Review of Existing Regulation

Table 1: Roadmap of Functional Food Regulations

Changes.

Regulation Main Goal(s)

Regulation of the

Head of BPOM

HK. 00.05.52.0685

(2005)

Provisions on the

Principal of

Functional Food

Supervision

revoked

Regulation of the

Head of BPOM

HK.

03.1.23.11.11.09909

(2011)

Claim Monitoring

in Labels and Food

Advertisements

Replacing

HK.

03.1.23.1

1.11.

09909

Regulation of the

Head of BPOM

1 (2018)

Processed Food Monitoring

for Particular Nutrition

Purposes.

One of the stages in RIA analysis is to disclose ten

principle of RIA questions and conduct RIA analysis

systematically. These questions are not to improve

the management process but expected as a policy

instrument to reach level of regulation quality that

adequate in accommodating stakeholders.

Table 2: Results of Field Data Collection (expert

judgment).

Question Answer (Tentative

Conclusion)

Is the problem

correctly defined?

According t0 the contents of

road map on Table 2

regulation amendment of the

Head of BPOM

Is the government

action apposite?

According to stakeholders,

regulations amendment are

less apposite because it has

becme biased between

functional food, claimed food,

and food for particular

nutritional needs.

Are the existing

regulations is the best

step for the

government?

According to the regulator it’s

the best alternative. Yet to

stakeholders, it’s in apposite

or inappropriate.

Is there a legal basis

for a regulation?

Yes, because it’s motivated

with health constitution.

What are the levels of

government

bureaucracy that are

involved in

coordinating this

regulation?

Ministry of Health and BPOM

(interviews with BPOM).

Are the regulations

useful, compared to

its costs?

Not yet concluded (data

analysis is a must)

Is distribution of the

effect would be

transparent among the

community?

It must be, so that the

implementation can be ruled,

monitored and controlled by

its implementation.

Are the rules clear,

consistent, understood

and accessed by

users?

It is clear and must be

accessible to all Indonesians.

Are all parties that

Interested in having

the same opportunity

to express their

views?

All parties (stakeholders) have

the same opportunity to

express their opinions. But not

yet stated in this regulation.

How compliance with

regulations can be

achieved?

Gradually, the process of

transition is meticulous in its

application related to the

possible impacts.

The process of RIA in analyzing and communicating

the impact of new regulations are as follow:

1) Problems Framework

Problems framework are expected to be resolved with

Regulation of the Head of BPOM Number 13 year

16th AFC 2019 - ASEAN Food Conference

2016 about Claim Monitoring in Labels and

Processed Food Advertisements, includes:

a. Are all supporting facilities to implement

Regulation of the Head of BPOM No. 13 year

2016 ready?

b. Could Regulation of the Head of BPOM No.

13 year 2016 protect and counterpoise the

interests of all stakeholders (community,

academics, industry (large and small

industries / UMKM) and the government?

c. Is through the Regulation of the Head of

BPOM No. 13 year 2016, government can

guarantee to improve quality of functional

food, protect consumers over food safety,

quality and nutrition and create business

competitiveness?

2) Identification of Purpose

The purposes achieved by Regulation of the Head of

BPOM Number 13 year 2016 are to guarantee the

quality of functional/claimed food, protect consumers

over food safety, quality and nutrition and create

business competitiveness.

3) Alternatives of Problem Solution

Alternative solutions to overcome the problem are as

follow:

a. Continuing the Regulation of the Head of

BPOM Number 13 Year 2016.

b. Revising the Regulation of the Head of BPOM

Number 13 Year 2016 (with addition of

certain articles).

c. Revoking the Regulation of the Head of

BPOM Number 13 Year 2016.

4) Benefits and Costs Analysis

Cost Benefit Analysis or CBA is an approach for

policy recommendations which allows analysts to

compare how much loss or costs incurred, advantages

or benefits derived from policy implementation.

3.2 Regulation Analytic Hierarchy

Process (AHP) with Cost Benefit

Analysis (CBA) Model

Analytic Hierarchy Process (AHP) designed to

comprehend expert perceptions with certain problems

through procedures which devised to reach

preference level among various alternative sets, so

that this method considered as objective - multi

criteria model (Permadi, 1992).

The principle of AHP is grading each aspect,

criteria of aspect indicator, indicators with

comparison between factors, as well as policy or

alternatives to be taken. Afterward, those aspects will

be compared which of the highest benefits received,

whether economic, social or environmental aspects.

Finally, comprehending the policy that will be

chosen, whether continuing the Regulation of the

Head of BPOM Number 13 year 2016 concerning

Claim Monitoring in Labels and Processed Food

Advertisements. The following is a list of policy

choices.

Table 3: Criteria of Policy Selection from Result B / C

Ratio.

B/C

Ratio

< 1 Status quo, continuing the Regulation

of the Head of BPOM No. 13/2016

B/C

Ratio

= 1 Revise the Regulation of the Head of

BPOM No. 13/2016

B/C

Ratio

> 1 Revoke the Regulation of the Head of

BPOM No. 13/2016

1. Status quo, continuing the Regulation of the Head

of BPOM No. 13/2016: Policy Alternative 1

Experts argued that certain rules regarding to

functional food in Indonesia is unrequired. It has

been ruled by the existing Food Claims regulation,

because its social benefits will be less than costs

that may be incurred (cost> benefit).

2. Revise the Regulation of the Head of BPOM No.

13/2016: Policy Alternative 2

Similar to Status quo, nevertheless given

improvements from existing regulations. Experts

argued that it is quite necessary to have particular

rules regarding to functional food in Indonesia by

appending certain clause on the existing Food

Claims regulation, because its social benefits will

be equal to costs that may be incurred (cost =

benefit).

3. Revoke the Regulation of the Head of BPOM No.

13/2016: Policy Alternative 3

Experts argued that it is absolutely necessary to

have particular rules related to functional food in

Indonesia. Functional food must be clearly

regulated, so it should revoke the Regulation of

the Head of BPOM No. 13/2016 and replace it

with a more macro regulation towards Functional

Food, because the social benefits will be greater

than its costs that may be incurred (cost <benefit).

Aspect framework and aspect indicator or criteria

which used in this compilation of benefits and costs

hierarchy that will be obtained from regulation of

functional food policy in Indonesia which going to be

developed based on Focus Group Discussion (FGD)

and depth interviews with all stakeholders involved.

The following is hierarchy schemes in AHP

(variables in this hierarchy have been adjusted to the

Regulatory Impact Assessment (RIA) Functional Food Policy in Indonesia

result of FGD and information of related parties).

Some experts are liaison unit of:

1. Nutrition and Health Programme, Faculty of

Public Health and Nursing, UGM

2. Department of Agricultural Product

Technology, Faculty of Agricultural

Technology, UGM

3. Faculty of Agriculture, UGM

4. Department of Nutrition, Faculty of Human

Ecology, IPB

5. Department of Food Technology, Faculty of

Agricultural Technology, IPB

6. Department of Agricultural Product

Technology, Faculty of Agricultural

Technology, Brawijaya University

7. Nutrition and Public Health Study, Faculty of

Medicine, UNDIP

8. Faculty of Agriculture and Animal Husbandry,

UNDIP

9. National Standardization Agency (BSN)

10. Indonesian Association of Food and Beverage

Entrepreneurs (GAPMMI)

11. Food Researchers at the Indonesian Institute of

Sciences

12. Indonesian Functional and Nutraceutical Food

Activist Association (P3FNI)

Figure 1: Hierarchy of Social Costs Incurred.

Figure 2: Hierarchy of Social Benefit Obtained.

3.3 Result of AHP Analysis with CBA

Model

Based on data and experts, the result shows the main

aspect from cost of functional food regulation is

environments by 0.467. Furthermore, it is also the

most important aspect in terms of benefits of

functional food regulation by 0.5781. Hence, the

outcome of regulation for functional food policies in

Indonesia will cause greatest costs toward

environments aspect compared to social and

economic aspects.

Table 4: Result of AHP Analysis with CBA Model Aspect

Determination.

Aspect Benefit Cost B/C Ratio

Social 0,1319 0,141 0,9

Economic 0,2900 0,392 0,7

Environments 0,5781 0,467 1,2

Table 4 shows that the greatest social and benefit cost

are environmental aspect, followed by economic and

social. Therefore, it has became a reason for

regulation of functional food policies in Indonesia.

Based on table 5, it can be analyzed that according

to expert in terms of costs and benefits of priority for

alternative policy is alternative policy 3, that is to

revoke the Regulation of the Head of BPOM No.

13/2016.

16th AFC 2019 - ASEAN Food Conference

Table 5: Recapitulation of calculation for Social Benefit

and Cost.

Social

Cost

Prio-

rity

Social

Benefit

Prio-

rity

Policy

Alternative

0,335 2 0,309 2

Policy

Alternative

0,210 3 0,165 3

Policy

Alternative

0,454 1 0,525 1

Table 6: Result of AHP Analysis with CBA Model in

determining Policy alternative of Functional Food

Regulation in Indonesia.

Policy Priority B/C Ratio

Revoke the Regulation of the Head of

BPOM No. 13/2016

1,15

Revise the Regulation of the Head of

BPOM No. 13/2016

0,785

Status quo, continuing the Regulation

of the Head of BPOM No. 13/2016

0,923

From Table 6, the most likely policy priority is

revoke the Regulation of the Head of BPOM No.

13/2016 that result to optimal scenario wherefore B/C

> 1 by 1.15. Whereas second priority alternative is

revise BPOM Head Regulation No. 13/2016 gives

small benefit value with a B / C ratio by 0.785, this

second alternative is not a priority because B / C <1.

Likewise third priority alternative Status quo,

continuing BPOM Head Regulation No. 13/2016

gives the smallest benefit value with a B / C ratio by

0.923, and because B / C <1 this alternative is also not

a priority.

4 CONCLUSIONS

We hope you find the information in this template

useful in the preparation of your submission. Based

on results of AHP analysis for benefits and costs, the

most likely policy priority is revoke the Regulation of

the Head of BPOM No. 13/2016 that result to optimal

scenario wherefore B/C > 1 by 1.15. Whereas second

priority alternative is revise BPOM Head Regulation

No. 13/2016 gives small benefit value with a B / C

ratio by 0.785, this second alternative is not a priority

because B / C <1. Likewise third priority alternative

Status quo, continuing BPOM Head Regulation No.

13/2016 gives the smallest benefit value with a B / C

ratio by 0.923, and because B / C <1 this alternative

is also not a priority.

Revoking regulation of the Head of BPOM No.

13/2016 indicates that interviewees or resource

persons eager to restored Regulation of the Head of

BPOM HK. 00.05.52.0685 Year 2005 about the Basic

Provisions for Functional Food Supervision.

ACKNOWLEDGEMENTS

Thanks to the Directorate of Industrial Technology

Development, the Directorate General of Research

and Development Strengthening, Ministry of

Research, Technology, and Higher Education who

has funded this research through the National

Innovation System Research Program (INSINAS)

Program in 2018-2019. Priority Field Based on

LPNK RISTEKDIKTI Flagship, with reference to the

theme: Theme 1 Development of Local Resource-

Based Functional Food WBS 6 Social, Economic,

Policy, and Management, including identification of

potential food-based local food, Education /

Awareness, Behavior and Parenting, Economic,

Social and Cultural Impacts, and Regulations, Policy

and Management.

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https://www.scribd.com/document/357940198/Prof-

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