File pic Photo: Oleg Doroshenko/123RF
The head of Consumer NZ says the Fair Trading Act lacks the teeth to effectively deter companies from making misleading claims over their products' environmental credibility.
Clorox, the company behind Glad waste disposal and food storage bags, has been hit with an A$8.25 million (NZ$8.88m) penalty in Australia's Federal Court for falsely claiming bags were made from 50 percent recycled "ocean plastic".
The bags actually contained waste plastic collected from communities in Indonesia located up to 50km inland.
Australian news outlet ABC reported the Australian Competition and Consumer Commission (ACCC) sued Clorox for misleading customers between June 2021 and July 2023.
It quoted the ACCC saying claims that Clorox's Glad to be GREEN '50 percent Ocean Plastic Recycled' Kitchen Tidy Bags and Garbage Bags were made from 50 percent recycled plastic waste collected from the sea were made on packaging for more than 2.2 million products.
The report said the ACCC's case was upheld after the Federal Court ruled that the packaging implied a "relationship between the products and the ocean", and that the 'GREEN' label suggested they were environmentally friendly goods.
NZ regulators reluctant to pursue prosecutions
Greenwashing is the practice of misleading consumers into believing a company or its products are more environmentally friendly than they actually are.
Jon Duffy Photo: Jon Duffy
Consumer NZ chief executive Jon Duffy told Morning Report that under the Fair Trading Act, the maximum penalty that could be levied on businesses for green washing in New Zealand was $600,000.
"For most large entities it's not a deterrent because their sales will far outmatch what they're likely to be fined and it can make regulators like the Commerce Commission reluctant to spend hundreds of thousands of dollars taking prosecutions knowing the fines will be so paltry," Duffy said.
The consumer watchdog had been aware Glad's claims about its Glad to be GREEN bags range had been demonstrably untrue since examining the manufacturing of the products in 2023.
"This has actually been quite a widely known greenwash in Australia and New Zealand just because it's so blatant. It's one of those rare cases that, with a little bit of research, it's quite easy to detect," Duffy said.
Greenwashing was a significant problem in New Zealand, he said.
"You don't have to look too far if you walk down a supermarket aisle to find green claims that are lauding the green credentials of a product but actually may struggle to be substantiated if they're put under a microscope," Duffy said.
Shoppers should watch out for vague, meaningless language designed to imply good environmental practice on products and advertising.
'Glad did not intend to mislead customers' - Clorox spokesperson
A spokesperson for Clorox said the business respected the Federal Court's finding.
"GLAD Australia takes seriously its obligations to package and market its products with claims that are accurate and substantiated.
"While the ACCC and the Court recognised that Glad did not intend to mislead consumers, we respect this outcome and see this as an opportunity to further enhance our practices and reaffirm our commitment to offering products that help reduce environmental impact and meet consumers' evolving needs," the spokesperson said.
Glad's range of '50 percent Ocean Plastic Recycled' Kitchen Tidy Bags and Garbage Bags was discontinued in 2023, the person said.
