The ACCC has just released its white paper on Green Marketing and the Trade Practices Act – Wayne Robinson looks at its impact on printers, and with fines of up to $1.1m waiting in the wings for print businesses and $220,000 for individuals it is an important read
As more print buyers ask for environmentally friendly print many sales and marketing staff find it easy to make green claims, but be warned, claims without substance will result in the ACCC coming down like the proverbial ton of briocks on those who it believes are exaggerating their eco credentials.Environmental claims can be a powerful marketing tool. Companies are increasingly using environmental claims in an attempt to differentiate themselves and their products from the competition.
These claims come in a wide range of forms, including statements about environmental sustainability, recycling, energy and water efficiency or impact on animals and the natural environment.
From the ACCC’s perspective it is essential that customers are provided with accurate information in order to make informed decisions.
The ACCC says that firms which make environmental or green claims should ensure that their claims
are scientifically sound and appro-priately substantiated.
Customers are entitled to rely on any environmental claims you make and to expect these claims to be truthful.
Not only is this good business practice; it is law.
The Trade Practices Act 1974 (the Act) states that businesses must not mislead or deceive consumers in any way, and it carries serious penalties for businesses that fail to meet these requirements.
The Trade Practices Act
THE Act applies to all forms of marketing, including claims on packaging, labelling and in advertising and promotion across all mediums (print, TV, radio and internet).
This means that any environmental claims you are considering need to be assessed against the requirements of the Act. Failure to abide by the rules set out in the Act can result in serious penalties.
There are two main provisions in the Act affecting the way you make environmental claims:
Misleading and deceptive conduct
The Act contains a broad prohibition of misleading and deceptive conduct. Businesses have an obligation not to engage in any conduct that is likely to mislead or deceive consumers. Note that the conduct only needs to be likely to mislead or deceive; it does not matter whether the conduct actually misled anyone, or whether the business intended to mislead – if the conduct
was likely to mislead or deceive, the Act is contravened.
Broadly speaking, the conduct will be considered likely to mislead or deceive if there is 'a real or not remote possibility that members of its target audience have been misled. Plainly put, if part of
the audience to which it is directed could be misled, there may be a contravention of the Act..
Misleading conduct can include silence if in all the relevant circumstances there is an obligation to say something or if a reasonable expectation is created that matters will bedisclosed, if they exist. For example, putting ‘made from recycled material’ on a product when only a part of the product (such as the packaging) is made from recycled material could be misleading by silence.
Misleading conduct can include predictions if the maker had no reasonable ground for making it, or if the prediction should have been qualified and was not. A marketer making a statement about something that will happen in the future, such as ‘by 2010 this product will be made entirely from wood pulp from plantation trees’, could be found to be misleading if the marketer could not show there were reasonable grounds for making the statement at the time it was made.
Misleading conduct can also include advertising. The law will allow a degree of latitude when statements are clear puffery on the basis that most reasonable consumers are aware that some vague or generalised exaggeration occurs in advertising. For example, a claim such as ‘world'’s best pies’ would likely be mere puffery. However, you should still exercise caution when making such claims, as you may be in breach of the law if consumers could be misled by your statements.
Business names could be misleading if they imply green credentials that do not exist. For example, a business that promotes itself as an environmentally responsible printing company using a name such as ‘Completely Clean & Green Print Co’ may be at risk of misleading its customers if it in fact produces print from some unclean sources.
False or misleading representations
In addition to the general rule against misleading or deceptive conduct, the Act prohibits a variety of false or misleading representations about specific aspects of goods and services. False and misleading representations are more serious than general misleading and deceptive conduct and, where criminal pro-ceedings are taken, can carry serious penalties under the Act – including fines of up to $1.1m.
There are two specific forms of prohibited misrepresentations that are especially relevant to environmental claims. The Act requires that a business not falsely represent goods as being of a particular standard, quality, value, grade, composition, style or model or having a particular history or previous use.
Put simply, goods must comply with any description that is provided in advertising or labelling. This is especially relevant to claims regarding recycled and recyclable content or the environmental impact of components used in the product.
The Act also requires that a business not represent that goods or services have sponsorship, approval, performance characteristics, accessories, uses or benefits they do not have.
Those most relevant to environ-mental claims are:
Sponsorship – this connotes some form of backing by another party. The unauthorised use of a trademark may breach this provision.
Approval – this provision is mainly used when a business claims to have approval from a government agency or licensing board for its products, when no such approval has been given.
Performance characteristics – com-panies should not falsely claim that their goods or services have certain capabilities or effects they do not have.
Benefits – companies should not claim that a particular good or service has certain environmental benefits if these claims cannot be substantiated.
Making environmental claims
As discussed in the previous section, the Act applies to all forms of advertising, including claims on pack-aging, labelling and in advertising and promotions in all mediums.
Special care must be taken when you refer to characteristics of the product or service that will probably be very important to your customers, such as environmental claims.
Not only do questionable advertising practices disenchant consumers; they carry serious legal risks.
It is vital businesses ensure that any messages promoted in their advertising to customers give the whole picture and will not mislead or deceive them.
You should be careful that the overall impression you create about the goods or services you sell is not misleading. In other words, it is not enough for each representation to be technically or narrowly correct.
It is just as important to look at the overall impression created in the minds of average customers in the target audience.
If you wish to make environmental claims about your business or your product, they should be clearly
and accurately explained.
