Indonesian Cosmetic Regulation and Market Perspectives Mayagustina Andarini Deputy Director Cosmetic Product Safety Evaluation The National Agency for rug and Food Control, the Republic of Indonesia Korea, October 2 nd ,2014 1

Becoming an innovative, credible and internationally recognized drug and food regulatory authority for public protection. To conduct pre-market evaluation and post-market control based on international standard. To implement quality management system consistently. To optimize partnership with stakeholders in various lines. To empower public in protecting themselves from the risk and harmful drug and food to health. To build the learning organization.

GLOBALIZATION

COMPETITION ↑↑ DEMAND ↑↑ GLOBALIZATION Time Transportation Economic and Industrial Community Increased of Free Trade Elimination of Tariff COMPETITION ↑↑ DEMAND ↑↑ FREE TRADE LOW OF PRODUCTION COST HIGH PRODUCT QUALITY

IMPACT OF GLOBALIZATION FOR REGIONAL (ASEAN) ASEAN established the ASEAN Community through increased cooperation in the field of economic (ASEAN Economic Community), social culture (ASEAN Socio Culture Community), and security defense (ASEAN Security Community) Making the ASEAN Charter, which became the basis of legal and institutional framework within the organization and the community of ASEAN

ASEAN Economic Community Mission: ASEAN Single Market and Production Base Increased prosperity through economic development in ASEAN Free trade, services, investment of skilled labor and the free flow of capital

Single market and production base ASEAN Economic Community (AEC) Blueprint ASEAN Integration Strategic Framework (2009 – 2015) Single market and production base A.1 Free flow of goods Provide technical assistance in the harmonization standards and technical regulations primarily in the 12 priority sectors of the AEC A.2 Free flow of services Competitive economic region Equitable economic development Integration into the global economy

2008: ASEAN TEN NATIONS, ONE COMMUNITY AND ONE STANDARD

Why Harmonization is needed ? World almost without limit (borderless)  towards global community  become regional challenges to strengthen its position in the global level Improvement in quality, safety and effectiveness in accordance with the accepted of international standards and requirements  make globally competitive ability The business community needs certainty and transparency Consumer has the right to easily access the desired product.

ASEAN Harmonization In Cosmetics KTT Asean In Singapore (1992) ASEAN Free Trade Area (AFTA) Reduction of Technical Barrier MRA Common Effective Preferential Tariff (CEPT) 11 priority integration sectors in ASEAN economic (including cosmetics) ASEAN Consultative Committee for Standards Quality (ACCSQ) ASEAN Harmonized In Cosmetic Regulatory ASEAN Agreement of Economic Ministry (AEM) 2 Sept’ 03 Cosmetic Product Working Group (CPWG) (1998) ASEAN Harmonized Cosmetic Regulatory Scheme (AHCRS)

Agreement on the AHCRS ASEAN Harmonized Cosmetic Con’t. Regulatory Scheme (AHCRS) 2 September 2003 Con’t. Signed by 10 ministerial-level representatives of the ASEAN member countries ACD Implementation Agreement on the AHCRS SCHEDULE A ASEAN Mutual Recognition Arrangement (MRA) 2003 SCHEDULE B ASEAN Cosmetic Directive (ACD) 2008 Implementation of ASEAN Harmonization In Cosmetics Implementation of Mutual Recognition Arrangement (MRA) on 1st January 2003 Special deal is done by the member states agreed to apply AHCRS Through Notification System PMS/PSE Implementation

ASEAN Harmonization of Cosmetic is for : Enhance cooperation between ASEAN member countries in order to guarantee the quality, safety and claims benefit of the cosmetics marketed in the ASEAN. Removing trade barriers through harmonization of technical requirements for cosmetics and impose a single standard. Enhance the competitiveness of ASEAN products.

CHANGE OF PARADIGM BEFORE ASEAN HARMONIZATION AFTER 1. Registration System 1. Notification System 2. Pre Market Evaluation 2. Post Market Control 3. Post Marketing Vigillance 3. Product Safety Evaluation (PSE)

Product Information File Cosmetic Control System Post-Market Control Pre-Market Control Post-Market Control Product database NOTIFICATION SYSTEM Sampling Product testing Inspection PMS/PSE Product Information File (PIF) Cosmeto- Vigilance Product Notification To NADFC PIF Audit Notification Number Quality Safety Efficacy

ACDTransposition of ACD into Indonesian National Regulation (www.pom.go.id) Decree of Minister of Health No. 1175/Menkes/Per/VIII/2010 concerning License of Cosmetic Production Decree of Minister of Health No. 1176/Menkes/Per/VIII/2010 concerning Notification of Cosmetic Decree of the Head of National Agency for Drug and Food Control No. HK.03.1.23.12.10.11983 year 2010 concerning Criteria and Procedure of Cosmetic Notification Submission. Decree of the Head of National Agency for Drug and Food Control No. HK.03.1.23.12.10.12123 year 2010 concerning Guidelines of Product Information File Decree of the Head of National Agency for Drug and Food Control No. HK.03.1.23.12.10.12459 year 2010 concerning Technical Requirements of Cosmetic. Decree of the Head of National Agency for Drug and Food Control No. HK.03.1.23.08.11.07517 year 2011 concerning Technical Requirements of Cosmetic Ingredients. etc

Implementation of ASEAN Cosmetic Directive Pre-market evaluation (Registration) to Notification (1st January 2011), caused a greater responsibility to the manufacturers / importers on cosmetic safety, quality and claim benefit. Cosmetics should be notified by the manufacturer / importer to the NADFC and guaranteed its quality and safety by: Complying the regulation Providing the Product Information File Reporting serious adverse events Cosmetic notification applicable for all cosmetics categories that will be circulated in Indonesia

Implementation of ACD (con’t) Strengthening of Post-Market Surveillance (PMS) : Inspection of production/distribution facilities Inspection of Cosmetic GMP Sampling and laboratory testing Product Information File Audit and Product Safety Evaluation Advertisement and Promotion Control Consumer Empowerment and Awareness by increasing the understanding on cosmetic in order to protect themselves from harmful cosmetic

Con’t Efforts to raise consumer awareness: Information dissemination, through: Leaflet, brochure, NADFC website. Public Advertisement Services on Electronic Media Talkshow Direct consultation at exhibition NADFC Consumer Complain Service Unit Province Offices engagement (involving some government institutions) NGO engagement

Cosmetic Notification Implementation of Cosmetic Notification

Technical Data for Import Cosmetic Taxpayer Registration Number Trading Business Permit Importer Identification Number Letter of Authorization Certificate of Free Sales and Certificate of Good Manufacturing issued by Authorized Government and must be legalized by Indonesian Embassy in the country where the principle is

Number of Applicants

Cosmetics that meant to be marketed in Indonesia must be notified to NADFC and its Product Information File must be prepared

Notified Cosmetic Product

MARKET PERSPECTIVES Numbers of Company: 2010 2011 2012 2013 mei 2014 TOTAL IMPORTERS 130 150 109 114 47 550 LOCAL Manufacturer 197 107 38 40 17 399 CONTRACT 104 136 82 97 57 476 431 393 229 251 121 1425 824 (Sum of 2010-2011)

INDONESIA Population: 237.641.326 Wide : 1826440 km2 (land), 93000km2 (sea) Ratio Male and Female: (1.000 : 986) Cosmetics industry is one of the priority sectors in the enhancement industry today because it still requires the availability of specialty chemical raw materials (specialty chemicals).

Gross Domestic Product of Indonesia

Indonesia’s Cosmetics Market Figures of Nationwide sales of cosmetics by Ministry of Industry : * 2011 : 667 Million USD * 2012 : 815 Million USD Ministry of Industry stated sales of the cosmetics industry in Indonesia grew 15 percent in the year 2013. Export cosmetics this year expected to reach $ 406 million, increasing up to 20 percent. Beauty trends in Indonesia : * Basic skincare and make-up products * Sales growth in men skincare product

Notified Cosmetic Based On their Product’s Category

Prospects for cosmetics industry are looking good in Indonesia

Beauty and Personal Care in Indonesia (Euromonitor 2013) Significant price increase leads to accelerating value growth in 2013 Products targeting Muslim female consumers are on the rise Multinationals continue to lead despite intensified competition from locals Increasing role of health and beauty retailers Healthy prospects for beauty and personal care

Change of Cosmetic Control Paradigm from registration to notification system Provide a Strengthening in Post Market Surveillance and Consumer Awareness

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