See Red and Stop Before Making Green Claims
Marketing goods or services based on their "environmental" credentials is a powerful selling technique. All too often, these claims are made without careful consideration of the accuracy or evidence for the claim. Making environmental claims that are inaccurate or unsubstantiated will be misleading and deceptive conduct or making a false or misleading representation under the Australia Consumer Law ("ACL"). Whilst there are no pecuniary penalties for misleading and deceptive conduct, related provisions of the ACL specifically targeting such conduct in relation to the supply of goods and services have pecuniary penalties of up to $1.1 million for a corporation and up to $220,000.00 for an individual.
The Australian Competition and Consumer Commission ("ACCC") has very clearly signalled its intention to pursue claims about the environmental benefits of products or services which are vague, unsubstantiated, misleading, confusing or inaccurate.
The following guidelines should be followed. An environmental claim must be:
- Accurate, claims should be able to be substantiated;
- Specific not unqualified or of a general nature;
- In plain language;
- Related to a real benefit and not overstate the benefit;
- Identify whether the benefit refers to the packaging or product itself;
- Made in light of the whole product life cycle;
- Pictures can amount to misrepresentations;
- Verified if related to an endorsement or certification.
Other than being accurate, the principal difficulty in making a green claim is the potentially broad and unqualified nature of the claim. For instance, use of the word "green" is vague and imprecise and leaves a consumer having to make their own assessment of the meaning of the term. This creates potential for the consumer to be misled. Remember the intention of the advertiser is not relevant to an assessment of whether a particular claim is misleading or deceptive. Similar problems exist with the use of phrases such as "environmentally friendly" or "environmentally safe". Remember also that "pictures" in the content of the claim can amount to a misrepresentation.
Claims about the energy efficiency of a product can also be problematic, particularly if the efficiency is not quantified by comparison to a known benchmark or rating system. The Star System (Equipment Energy Efficiency Programme) of rating products such as refrigerators, freezers, washers, clothes dryers, dishwashers and air conditioners is based on a very complex set of testing criteria. Any false representation about a product's performance or energy efficiency constitutes a serious offence under the ACL and can lead to heavy pecuniary penalties.
Caution should also be adopted when using the term "recyclable". If a product or some component of it is not recyclable or facilities for recycling do not exist, the claim will be false. Again heavy pecuniary penalties can apply.
The following is a useful checklist before making environmental claims:
- Avoid using terms like "safe" and "friendly" or unqualified pictures or graphics;
- Specify the benefits of a product in plain language;
- Make sure any environmental claim about a product can be substantiated;
- Make sure you do not convey the impression that a product is environmentally neutral. Very few products are!
- Only make appropriate claims. For instance, claiming that a product has not been tested on animals when such a product would never be tested on animals would be inappropriate.
Hugh & Associates has the experience and resources to assist clients with their obligations under the ACL and the Competition and Consumer Act. For more information or assistance, please do not hesitate to contact Robert Hugh on Tel +61 2 9299 8220 Fax +61 2 9299 6530 or email: rdh@hughlaw.com.
Further information is available from our website: www.hughlaw.com or by email acl@hughlaw.com