Following the release last year of its long-awaited environmental claims guidance in December 2023, and following a flurry of domestic and international greenwashing enforcement activity, the Australian Competition and Consumer Commission (ACCC) has commenced greenwashing proceedings in the Federal Court against a manufacturer of kitchen and garbage bags.
In essence, the ACCC alleges that the manufacturer engaged in misleading or deceptive conduct by overstating the environmental benefits of the bags in a bid to take advantage of consumer concern about ocean plastic pollution.
'Dominant message' alleged is that the bags were made from ocean plastic
ACCC Chair Gina Cass-Gottlieb sums up the regulator's case as follows:
'the headline 'ocean plastic' statements and wave imagery on the…bag packaging, and the use of blue coloured bags, created the impression that these…bags were made from plastic waste collected from the ocean or sea, when this was not the case'.
The ACCC submits that the bags were in fact made of up to 50% resin derived from recycled plastic that had been collected from communities situated up to 50 kilometres from a shoreline (with the remainder comprised of non-plastic waste resin processing aid and dye/ink).
Qualifying statements included on the packaging are claimed to be not enough to counteract the 'dominant' message to consumers
Central to the ACCC's case is that:
'the Ocean Plastic Representation was the dominant message conveyed by the Packaging, notwithstanding the references to ‘ocean bound plastic’'
For context, these qualifying statements, which were included on the back of the packaging and in smaller font than the 'headline ocean plastic' message on the front of the packaging included that the bags were:
'[made from] 50% ocean recycled plastic, and have the trusted strength of Glad® to hold household waste on its way to landfill. Recycling ocean bound plastic reduces plastic pollution before it enters the ocean, helping to reduce pollution in waterways, save marine life and put an end to irresponsible waste'
and:
'Made using 50% ocean bound plastic that is collected from communities with no formal waste management system within 50 km of the shore line.'
Misleading or deceptive conduct
The ACCC alleges the manufacturer's conduct:
'deprived consumers of the opportunity to make informed purchasing decisions, which might have resulted in the purchase of alternative products. Consumers may have purchased and paid for goods represented as conferring an environmental benefit (the removal of plastic waste from the ocean or sea; further or alternatively, from an ocean or a sea (including up to the shoreline)), where either there was no such environmental benefit, or such benefit was overstated'.
In addition, the ACCC submits that the manufacturers' conduct 'undermined competition'.
'The Respondent sought to promote its products as being more environmentally beneficial than those of its competitors. It also sought to promote its products as having a particular environmental benefit, making its products appear more attractive than alternative offerings'.
The ACCC alleges that the conduct described amounted to misleading or deceptive conduct (in contravention of sections 18, 29 and 33 of the Australian Consumer Law (ACL)).
So what (and what's next)?
There isn't that much new in the world of misleading & deceptive conduct: Regardless of whether the ACCC's claim ultimately succeeds, the dangers and difficulties of relying on disclaimers or less prominent explanations to re-risk broad claims in product promotion are well established.
This is not even the first time the ACCC has taken issue with 'ocean plastic' claims: The regulator accepted a court enforceable undertaking from a yoghurt manufacturer last year following an investigation into the manufacturer's '100% ocean plastic' representations. As in this case, the ACCC considered that the disclaimers included on the packaging in that case were not sufficient to counteract 'headline representation of '100% ocean plastic'.
Tougher enforcement stance: Both ASIC and the ACCC have identified tackling greenwashing as an enforcement priority again this year. The ACCC's action in this case signals their tougher stance on the issue, following as it does ASIC's first successful greenwashing court action. Internationally, regulators are also stepping up their focus, including the UK, EU and the US.
Stronger greenwashing protections on the way? In Australia, the Senate is currently conducting an inquiry into greenwashing including considering 'legislative options to protect consumers'. The committee is due to report on 28 June 2024.
Suggested next steps for business
As flagged, the ACCC released its guidance for business (read: ACCC releases final environmental claims guidance) on how to avoid unintentional greenwashing in December 2023. The Australian Securities and Investments Commission (ASIC) has also released separate guidance.
Businesses should ensure that this is reflected in their marketing and approvals processes.
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