Australia Leads the Charge in Investigating False Green Advertising

by Narayan Subramanian
Legal Intern, Center for Climate Change Law

In the last few years, private companies in Australia have been increasingly scrutinized for misrepresenting the environmental credentials of their products and services in their marketing campaigns, also known as false green advertising, or “greenwashing.”  The charge has been led by the Australian Competition and Consumer Commission (ACCC), a regulatory body established in 1995 with the mandate of administering and enforcing Australia’s Trade Practices Act.  The Trade Practices Act was passed in 1974 to provide consumer protection and prevent restrictive trade practices of companies.  Specifically, Section 52 of the Trade Practices Act prohibits companies from engaging in misleading or deceptive conduct, and Section 53 prohibits false or misleading representations about a company’s products or services.  The ACCC has thus far successfully challenged a number of environmental claims made by private companies as false green advertising.  This blog post discusses six notable examples.

First, in 2008, the ACCC challenged De Longhi Australia Pty Ltd, an importer, distributor and supplier of electrical appliances, for making an unqualified claim in its advertising that the refrigerant gas R290 used in its portable air conditioners was “environmentally friendly.”  De Longhi provided a court-enforceable undertaking that it would modify its advertising to avoid unqualified claims.

In addition, the ACCC challenged false green advertising claims made by three automobile-related companies in 2008.  The ACCC brought a suit in the Federal Court of Australia against GM Holden Ltd for advertising that its Saab vehicles provided “carbon neutral motoring” as it would plant 17 native trees for every vehicle purchased.  The ACCC also challenged Goodyear Tyres for falsely labeling its LS200 tyres as “environmentally-friendly” because its production process emitted less carbon dioxide and its new BioTRED technology increased the life of the tire and improved fuel economy.  Finally, the ACCC challenged V8 Supercars Australia Pty Ltd for being misleading in its Racing Green Program’s claim that it was offsetting carbon emissions from its V8 Championship Emissions by planting 10,000 native trees.  The ACCC contended that the claim was ambiguous because it failed to state over what time span the carbon emissions would be supposedly nullified.  In each of these cases, the companies were required to provide a court-enforceable undertaking to revise their marketing schemes.  Additionally, GM Holden was required to undertake measures to offset the carbon emissions that had been incurred, and Goodyear Tyres was required to compensate all customers who had relied on its false advertising.

The ACCC successfully brought two other cases to the Federal Court of Australia in 2010 against Global Green Plan Ltd and Prime Carbon Pty Ltd for misappropriating funds that were meant for purchasing renewable energy certificates and misrepresenting the company’s carbon credits services and affiliations, respectively.  Both companies were required to halt their false and misleading practices, and Prime Carbon Pty Ltd was additionally required to publicize the court’s order to its customers.

Whether the Australian government votes to pursue reductions in its greenhouse gas emissions or not, this recent trend in increased accountability for green marketing claims is certainly encouraging.  The advantage that the ACCC has in pursuing these cases is that the Trade Practices Act has been specifically modified to include punishment for companies found to be in violation of the Act.  Australia has clearly proven itself to be one of the world’s leaders in cracking down on “greenwashing.”

For additional information about the cases discussed above, as well as links to the decisions, please refer to the Non-US Litigation Chart compiled by the Center for Climate Change Law.

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