Understanding The Purpose Of Certification Processing Commerce Essay

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Certification is a document or label attesting to the authenticity, quality, and standard of a product or service. Certification programmes for goods and services, ensures that the goods sold and services rendered are reliable, authentic, and that they meet the approved industrial standards in terms of operation flow, design, make or quality.

Certification comes in a variety of forms, namely as paper printed certification, sticker, packaging label and web-electronic badges.

Certification can either be compulsory or voluntary. Voluntary certifications like Healthier Choice Symbol (HCS) can attract more consumers. 7 out of 10 Singaporeans are aware of HCS certification and 69% of them use this to assist them in shopping for healthier food [2] . Compulsory certifications like the EduTrust certification for international student intakes are used to enforce regulations and laws [3] .

Examples of certification

Type of certification

Details

ISO International Organization for Standardization

An ISO certification certifies that a business meets the worldwide proprietary industrial and commercial standards.

Forest Stewardship Council (FSC)

FSC certification certifies that a product was from a socially and environmentally responsible forestry.

Gemmological Institute of America (GIA)

GIA certificate certifies authenticity and quality of gemstones.

Kimberley Process Certification Scheme(KPCS)

The Kimberley Process Certification Scheme (KPCS) certifies that the diamonds sold in stores were not from conflict zones or 'blood diamonds'.

Marine Stewardship Council (MSC) certification programme

The MSC's fishery certification program and seafood ecolabel certifies that the seafood produced was from sustainable fisheries

The Hazard Analysis and Critical Control Point (HACCP) certification

The HACCP certifies that the food manufacturing processes are protected from contamination and that the food produced is safe for consumption.

Restriction of Hazardous Substances (RoHS)

certification

The RoHS certification certifies that the electronic product does not contain hazardous materials above the maximum concentration level.

VeriSign provides Secure Sockets Layer (SSL) Certificates

The VeriSign certificate certifies that the online site is authentic, safe to enter and make online transaction.

The Healthier Choice Symbol (HCS)

The Healthier Choice Symbol (HCS) certifies that the product is healthier as compared to other similar products.

Singapore Halal Certification

Singapore Halal Certification certifies that the food product was produced in accordance to Islamic dietary laws.

EduTrust certification

The EduTrust certification certifies that the courses offered by the private education institution are of high quality and that it also meets the industry standards.

CaseTrust certification

CaseTrust has several different certifications and joint accreditations under its umbrella CaseTrust. A CaseTrust certification certifies that the business adheres to good sales practices and that the business or agency meets the standards set by the industry.

Singapore Innovation Class (I-Class) certification

Singapore Innovation Class (I-Class) certification certifies that a business has business excellence niche standard for innovation.

Singapore Service Class (S-Class) certification

Singapore Service Class (S-Class) certification certifies that a business has business excellence niche standard for service.

Singapore Quality Class (SQC) certification

Singapore Quality Class (SQC) certification certifies that an overall business excellence based on internationally benchmarked standards.

People Developer (PD) certification

People Developer (PD) certification certifies that a business has business excellence niche standard for people.

Importance of Certification

Certifications ensure product safety, bring about economic gains and protect the interest of the different stakeholders.

Product certification provides a platform for firms to realise a greater capacity of their sales volume and market potential in satisfying the financial interests of shareholders and creditors. The Halal global market is worth some US$600 billion a year and is expected to rise by 10 to 20% annually within the next few years [4] . In order to help local Singaporean companies profit from such a market trend, the Majlis Ugama Islam Singapore (MUIS), also known as the Islamic Religious Council of Singapore, has been assisting companies with the labelling of the Halal certification so as to seize overseas opportunities through expanding the scope of their business. Over the years, MUIS has worked with its overseas counterparts so that Singapore-made Halal products could be exported. This has enabled Singapore to successfully export its Halal products to the Middle East and even Europe. This shows that the market for certified products has been increasing, proving it to be a lucrative business.

Another example of growth in economic performance due to product certification is the World Wild Fund for Nature (WWF). It has been operating to encourage members towards the exclusive use of certified wood products. Group members, now totalling 80, have been publicly committed to purchasing wood and wood-based products from well-managed companies, who in turn, have been dedicated to buying 100% certified wood products since 2000. As the group accounts for between 10% and 25% of US wood and wood-based products consumption [5] , the importance of this dedication cannot be ignored. Delphi International estimated that the demand of the Group will increase about 15% to 20% per year. This rise in demand would certainly ensure stable and growing economic profit. Further proving that product certification plays a part in improving a firm's economic performance, as well as expanding firms' influences among different stakeholders.

From the consumer's viewpoint, product certification assures that the products bought are reliable and adhere to a certain level of standards. To have a product certified, firms must undergo a stringent checking process, ensuring the product is thoroughly screened for defects, in compliance with certification criterions, origins etc. before being sold.

Therefore, a certified product serves to build trust from consumers. For instance, dolphin-safe tuna certification label implies that the canned tuna is both dolphin-safe and environmentally friendly. A study of the impacts of dolphin-safe tuna labelling indicates that consumers did in fact respond positively to the eco-label and help grow the market for certified dolphin-safe tuna [6] . An example of why is certification of importance to policy-makers is illustrated by the Hazard Analysis Critical Control Points (HACCP). The HACCP allows customers to develop a trust in food safety. It is the main platform for international legislation and good manufacturing practices for all sectors of the food industry. It also forms a key component of many certified compliance standards and is recognised as a main element of international trade in food products. With this standard, consumers are assured of food product safety.

There are no reliable statistics available that illustrate the relationship between consumers' behaviour and their awareness towards certifications. Thus, we had to create our own survey to find out what the general consciences was. Surprisingly, 78% of respondents were found willing to change their shopping habits upon knowing more about product certifications, the rigorous procedures and testing for such certification.

Local Case - Halal Certification

Background of Halal certification

The Majlis Ugama Islam Singapore (MUIS), also known as the Islamic Religious Council of Singapore, is vested with the powers to act as the sole authority to administer and regulate Halal certification in Singapore. This is clearly stipulated in AMLA (Administration of Muslim Law act).

Section 88A(1): The Majlis may issue Halal certificates in relation to any product, service or activity and regulate the holders of such certificates to ensure that the requirements of the Muslim law are complied with in the production, processing, marketing or display of that product, the provision of that service or the carrying out of that activity.

Section 88A (5): Any person who, without the approval of the Majlis a) issues a Halal certificate in relation to any product, service or activity; or b) uses any specified Halal certification mark or any colourable imitation thereof, shall be guilty of an offence and shall be liable on conviction to a fine not exceeding $10,000 or to imprisonment for a term not exceeding 12 months or both.

The MUIS' Halal services were formally introduced in 1978 to cater to the needs of Muslim within the nation pertaining to the rising demand for Halal goods.

In 2009, Muis certified more than 2,600 premises. By providing halal certification for the various food industries, social interaction is indirectly encouraged between citizens of different races and religion. For example, Muslims could now enjoy Halal certified Chinese, Japanese cuisine whereas before that they probably have to restrict their diet to only Muslim food.

How Halal Certification Works

The standards of Singapore Halal Certification is managed and authenticated by two different aspects listed below.

Singapore MUIS Halal Standards (SMHS) [7] 

The Singapore Muis Halal Standards comprises of two different components, religion and technical. The religion component includes the "General Guidelines for Processing and Handling Halal Food"; where as the technical component is "General Guidelines for Development and Implementation of Halal Quality Management System (HalMQ)". The standards are developed by the Islamic Religious Council of Singapore (Muis), in collaboration with SPRING Singapore and Muis-appointed Halal standards committee.

The guidelines for processing and handling Halal food provide clear definition to the types of animals allowed for consumption. Clear instructions were given to product storage, servings, processing and handling of product. Hygiene and sanitization are part of the general guidelines as well.

Singapore MUIS Halal Quality Management System (HalMQ) [8] 

HalMQ was firstly introduced by the Majlis Ugama Islam Singapura (Muis) in ensuring the Halal requirements are in accordance to international known standards such as ISO and HACCP, starting 1 March 2008.

The ten principles of MalHQ are depicted in the flowchart below, [9] 

Establish a monitoring system for each HAPs

Review the Halal System

Verify the Halal System

Establish documentation & record keeping system

Establish corrective actions for each HAPs

Determine Halal Assurance Points (HAPs) their allowable limits and prescribed practices

Identify Halal threats and their control measures

Construct and verify the flow chart

Define the product/nature of business

Establish Halal Team

Global Case - Kimberly Process

Background of Kimberly Process "Blood Diamonds"

Before the year 2000, while many diamonds were bought and sold legally, there remained a fraction smuggled by rebel movements in South African nations to fund their civil war. This fraction of diamonds was termed, Blood diamonds.

Blood diamonds are also known as conflict diamonds. They refer to diamonds harvested and used by rebel movements to fund conflicts aimed at undermining the legitimate government.

In order to harvest diamonds, African villagers are enslaved by rebel military to do their biddings. Defiance or instances such as diamond thefts would result in punishments such as having their hands chopped off or even death. Harvested diamonds are subsequently sold on the black market to fund civil wars. Much of these diamonds could have become significant revenue sources for the African nations.

In view of such tragedy, in May 2000, Southern Africa diamond-producing nations met in Kimberley to discuss way to stop conflict diamonds. Kimberly process certification scheme was thus officially introduced to eradicate transactions involving conflict diamonds as well as to assure consumers that the diamonds they purchase are conflict-free. To date, there are 49 members, representing 75 nations of the Kimberley process.

How Kimberley Process Certification Scheme works

In order to have transacted diamonds certified, the first criterion is to be a member nation of the Kimberly process. The certificates must be government validated to be genuine and all certified diamonds must be transported in tamper-resistant containers.

Requirements of KPCS [10] 

Each shipment of rough diamonds crossing an international border should be transported in tamper-resistant containers and accompanied by a government-validated Kimberley Process Certificate.

Each certificate must be resistant to forgery, uniquely numbered and describe the shipment's contents.

The shipments are only supposed to be exported to other KPCS participant countries.

Trading diamonds between member and non-member nations is prohibited. Punishments for such actions include confiscation of goods, criminal sanctions or even membership disqualification. The Kimberly process certification scheme ensures that the only way to profit from the diamond trade is to be a member and to adhere to the policies of eradicating conflict diamonds.

The Kimberly Process Certification Scheme (KPCS) assures consumers the diamonds are from sources that are "free of conflict".

This tracking system allows for verifying the origins of diamonds. Diamonds from highly controversial sources are investigated and screened to ensure that they are Kimberly certified to be conflict free.

System of Warranties

It is considered a violation of the KPCS to issue a warranty declaration on a sales invoice unless it can be corroborated by warranty invoices received for purchases. Each company trading in diamonds must also keep records of the warranty invoices received and the warranty invoices issued when buying or selling diamonds. This flow of warranties in and out must be audited and reconciled on an annual basis by the company's auditors.

Principles of Self Regulation [11] 

Corporations involved in the diamond trade are required to adhere to the principles of self regulations. They are only allowed to trade with companies that include declarations on their invoices. Corporations are expected to reject diamonds with unknown origins and diamonds from non conflict-free declared regions. Furthermore, all employees of the corporation need to be educated on trade resolutions as well as government restrictions pertaining to conflict diamonds.

Failure to comply with these procedures may lead to the disqualification of the non-complying member country.

Effectiveness of the Kimberley Process Certification Scheme

The KPCS has successfully reduced market transactions of conflict diamonds from 15% to 1% since its introduction [12] . Conflict intensity pertaining to diamonds saw a sharp decrease after year 2000, right after Kimberly process was initiated (see Graph 1 below).

KPCS has increased the volume of diamonds traded on the legal market. In fact, a remarkable $125 million worth of diamonds were legally exported from Sierra Leone in 2006, compared to almost none at the end of 1990s. In addition, the Zimbabwe government is reported to have lost US$50 million to US$400 million in taxable diamond trade before the introductions of KPCS [13] . This generated substantial revenue for poor African governments.

Graph1 [14] 

Limitations

Membership of the KPCS is voluntary. The certification scheme would only be as effective as the level of commitment put in by various governments to ensure its implementation and success. However, in countries plagued with political unrest such as Democratic Republic of Congo (DRC) and Angola, implementation of KPSC has been tough. Evidently in DRC, the lack of resources, weak legislation enforcement and corruption have raised doubts about the validity of the certificates. The state is so weak that it fails to produce sufficient statistics data of diamonds in DRC. This makes tracking and detecting of "conflict diamond" nearly impossible.

Another limitation is the policy objective of KPCS. The main motive of KPCS is to remove "conflict diamonds" from the international market so as to prevent funding of violence through diamond purchases. The objective only serves as a temporary solution without solving the actual problem. No emphasis is placed on correcting governmental practices in affected countries. Conflict diamonds arise due to lack of government control, poor management in resources and absence of a transparent diamond trade.

The structure of diamond production poses yet another limitation. In countries like DRC, Angola and Lesotho where diamonds are widely mined by artisanal labourers using simple tools and equipment. Artisanal mining is mostly unregistered thus making it hard to track and monitor. Diamonds mined are usually sold on a first come first serve basis. Furthermore, transactions are unrecorded and neither are there any official written agreements. The KPCS focuses more on export and import of diamond rather than the line of production allowing room for further exploitation. Tracking can only be effective provided it starts from the mining stage at the very beginning.

Analysis of Case

Even though KPCS have made attempts to tackle problems with illicit conflict diamond trade, more needs to be done to eradicate conflict diamonds from the international diamond trade in countries like DRC, Angola and Zimbabwe. The KPCS has consistently failed to make bring about any differences in affected countries. This is due to weak enforcement, lack of resources and commitment. Any certification program requires regulators to ensure participants to strictly comply with the rules. Without ample commitment and resources, it restrains the regulatory capabilities and efficiency in carrying out their jobs properly.

Constant review by authorities is needed to improve current policy guidelines. Appropriate measures must be imposed to fix current circumstances. Moreover, experts could assume the role of advisory to assist participants in producing correct countermeasures and solutions. Requesting assistance from neighbouring countries or United Nations could help improve the situation in a short run. However in the long run, the government must be able to recover and regain control without foreign intervention in order to safeguard the people they were trying to protect.

Limitations

The focus of our project is on the analysis of 2 major certifications to bring out the effectiveness of Certifications. However, to do that, we require substantial information from related corporations to justify our claims and data. For example, although almost all jewellery outlets we surveyed (SK, Sookee, goldheart Taka etc) claimed that their diamonds came from South Africa, but none recognised the Kimberly process certificate. As such, we sent request to head offices of these jewellery outlets but none responded to our plea. We believe that the higher authorities for these firms would have a better understanding of their diamonds and its origins, unlike the sales person in these outlets who focus only on selling the GIA certifications which assures the quality of their diamonds.

Pertaining to Halal certification, we paid visits to subway outlets and obtained only verbal clarifications on why are subway outlets not halal. additionally, as subways outlets operates on a basis on franchise, most franchise owners operates accordingly to the regulations stated, therefore do not possess the curiosity of thoughts to question why is subway food not halal.

Conclusion

The evolution of the consumerism culture has brought a myriad of certifications which serve and provide varying functions and assurance into the market. Undoubtedly, certification programmes for goods have contributed to the social, political and economic interest of today's society. Certification has played a vital role in ensuring the authenticity, quality, and standard of a product or service, thus enforcing governmental or internationally set regulations and laws. It gives consumers the additional assurance to consume goods and services. In-depth investigations on both local and global certifications in the report; Halal Certification & Kimberley Process, have illustrated the implementation, purpose and importance of these certification programmes.

Appendix A Survey of 120 respondents

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