Multi Level Marketing Business Polemics, Halal or Haram?

Halal or Haram for MLM businesses submitted by NU organizations some time ago, but everything due to this case still based on the set provisions.

The National Conference (Munas) of Nahdlatul Ulama which held in Banjar on 27^th  February – 1^st   March 2019 then suggested that the Multi-Level Marketing (MLM) business is haram.

It said this business practice is haram for MLM which has a pyramid, sun or Ponzi scheme. Reported from bisnis.tempo.co, commission Chairman, Asnawi Ridwan explained 5 haram provisions of MLM businesses. Those five provisions are:

1. There is a registration fee or the requirement to purchase the participating product in the business activities and also in finding partners. From the purchasing product, it will make a bonus or commission.
2. The new members are dependence on deposits to survive and to benefit old one.
3. The marketing design produces bonuses or commissions and other awards based on specific activities.
4. The traded product obtained for free or cheaper. Whereas in other cases product benefits don’t match with the promises.
5. The bonuses are greater than product gains itself.

However, behind NU fatwa National Conference, the National Sharia Council of the Indonesian Ulema Council (DSN-MUI) had also issued a fatwa related to MLM which referred as a guideline for Sharia Direct Selling (PLBS)

However, the MUI also allows the Multi-Level business to continue otherwise known as halal. This refers to the MUI / VII / 2009 fatwa No: 75 / DSN which was ratified on July 25, 2009, that there are 13 conditions for MLM permissions:

1. There is a real transactions traded object that consisting of goods or services products.
2. Services or products offer goods aren’t prohibited and arent’t used for illegal transactions.
3. Transactions in the trade don’t contain elements of gharar, maysir, riba, dharar, dzulm, immorality.
4. There is no excessive price/cost increase (excessive mark-up)
5. Commissions gave by companies to members, the cost and form based on work performance directly related to the volume or value of product sales, and must maintain the business partner main income.
6. Bonuses given by the company to members must clear in number, at the transaction (contract) occur in accordance with the sales target of the goods as well as products set by the company.
7. No commission or bonus obtained passively on a regular basis without conducting guidance and/or sales of goods or services.
8. Provision of commissions or bonuses by companies or members (business partners) doesn’t cause ighra.
9. The distribution of bonuses shall be free of exploitation and injustice between the first and the next member.
10. The recruitment system, the ceremonial form of awarding funds doesn’t contain of the contrary elements to aqeedah, sharia, and morality, such as shirk, cult, immorality and so on.
11. Every business partner who conducts membership recruitment is obliged to foster and supervise the members he recruits.
12. Don’t do money game activities.
13. In applying Maqashid Syariah to see halal or not, it look on how far the practice after being review in accordance with the teachings of Islamic Shari’a. So it is not necessarily seen from the brand and label whether it is labeled sharia or not, but it is important to put forward some requirements that are in accordance with Islamic Shari’a in order to achieve a Mashlahat.

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