In light of the new Consumer Protection Act to come into play – we at Managed Care Economical Solutions wanted to fully understand how this may impact on us, like minded companies and individuals or on those that just don’t give a darn about change. MCES blog followers have certainly gathered that we are serious about the environment and what we as a company stands for.
We invite you to read a summary of the act prepared by MICHALSONS ATTORNEYS’; NICHOLAS HALL explaining this best in easy to understand language and what can be done.
In the next few months the Consumer Protection act will commence.
It is our opinion that there are sufficient laws in place protecting consumers against greenwashing. In order for the laws to be effective complaints need to be laid against those who greenwash.
To this end we recommend forming a consumer protection group under section 78 of the Consumer Protection Act to carry out this goal.
We refer to your email sent 9 April 2010 regarding the legal remedies available against companies that practice ‘greenwashing’. In order to give an answer to this question one would have to look at the variety of codes, principals and laws that govern organisations and the way they present their products (and themselves) to the public. Specifically we will look at
• The Advertising Standards Authority of South Africa’s (ASASA) code of conduct
• The Consumer Protection Act 68 of 2008 (CPA)
We will also look at methods of getting specific anti-greenwashing provisions put into relevant legislation or similar alternatives that would give consumers more direct protection against greenwashing attempts by organisations.
Greenwashing is the practice of organisations deceptively marketing their products or services as environmentally friendly or “green”. Typically this will involve overemphasizing supposedly “green” factors of a product when the majority of it is decidedly un-environmentally friendly. Greenwashing could also include printing or displaying products with trees, flowers or other ‘natural’ elements meant to make consumers believe the product is environmentally friendly when it is in fact not.
The Advertising Standards Authority of South Africa (ASASA)
ASASA has a code of conduct that applies to all advertising that takes place in South Africa. Generally the code states that all advertisements must be honest, must not make misleading claims, and where claims are made, the advertiser must be able to prove them.
The code has specific provisions that deal with “green” advertising and the standards that must be used when promoting environmental factors of a product or service. Of particular interest for this opinion, it states, that advertisements that make environmental claims must be accurate, meaningful and should not include vague, incomplete or irrelevant statements about environmental factors of a service or product.
While ASASA has the authority to rule against any advertisement made, it has very little power to effect punishments against organisations that breach its code. If a company is found guilty of breaching the code, ASASA can call on the organisation to pull the advertisement, or correct it so it no longer breaches the code. If the offending company fails to comply with the ASASA ruling and does not pull or correct the advertisement then ASASA will issue an Ad-Alert to its members. An advertisement with an Ad-Alert placed on it will not be published (in any form) by members of ASASA. Effectively this will result in the offending advertisement not being published on TV, Radio or in any printed media that is under the control of an ASASA member. Since the majority of publishers are part of ASASA it is unlikely that the advertisement will be advertised in any main stream media.
ASASA has no authority to impose fines or similar penalties against organisations that breach the code.
The Consumer Protection Act (CPA)
Parts of the CPA have already come into effect. These sections are, for the most part, administrative in nature and do not really convey any rights, the bulk of the CPA is only due to come into effect on 22 October 2010. When the remainder of the CPA comes into effect it will give consumers a huge amount of rights as well as several avenues to hold suppliers accountable. There are several sections of the CPA which are relevant for our purposes.
Section 24 of the CPA deals with the labelling of products, specifically S24(2)(a) prohibits packaging, labels, signs or advertisements that would likely mislead a consumer about implied or expressed characteristics of a good or service.
Section 29 deals with Standards for marketing goods and services. It prohibits any marketing activities that would mislead or deceive a consumer about the ‘nature, properties, advantages or uses’ as well as ‘any other material aspect’ of goods.
Section 41deals with false, misleading or deceptive representations when marketing or promoting goods or services. This section prohibits the making of false misrepresentations about the standards, quality or characteristics of goods or services. It also forces suppliers to disclose all relevant facts that relate to the above mentioned features.
Section 54 and 55 gives consumers the right to quality services and safe, good quality goods. In terms of services this means that the consumer has the right to the performance of the services in a manner and quality that persons are generally entitled to expect. For goods the right translates into the right to receive goods that are suitable for the purpose for which they are intended and that comply with applicable standards.
If a supplier fails to meet any of the above standards, a consumer can report them to;
• The Consumer Tribunal
• The Consumer Commission
• The applicable ombud (if one exists)
• The relevant Consumer Court
• An Alternative Dispute Resolution agent
• A Magistrate or High Court with jurisdiction (but only if all other remedies have failed).
The powers of the various bodies vary depending on who they are. The Tribunal and Commission have a variety of powers, ranging from the issuing of enforcement notices to the ability to force suppliers to discontinue product lines or services and can fine suppliers up to R1000 000.4 The ombudsmen will have similar powers and (depending on their founding constitutions) may be able to issue fines. The Courts probably have the most power and have the ability to imprison offenders for up to 10 years, and have no limit on how much they can fine for an infringement of the CPA.
Application of Laws
While the ASASA code of conduct and CPA do not make specific reference to greenwashing, the practice, I think, is definitely prohibited by the various provisions.
The fact the greenwashing is used precisely to deceive consumers about the true nature of a good or service will bring it in conflict with the ASASA code. Using the code one could lay a complaint to ASASA that an organisations advertisement is not honest or is misleading the consumer about the true nature of the product. Further using the specific environmental guidelines laid out in the code, one could also lay a complaint if the advertisement has vague or irrelevant environmental claims. While a complaint would only result in the pulling of an advertisement, or forcing the organisation to rework the advertisement so it no longer misleads the public, this is a simple and relatively quick means of acting against a greenwashing company.
The CPA offers far more robust and punitive measures against an organisation that green washes. Again, since greenwashing is a deliberate attempt to mislead a consumer about the environmental friendliness of a good or service it will fall foul of sections 24, 29 and 41 of the CPA. One could even argue that if the good is promoted as being environmentally friendly, and it is not, then the goods or service will not be up to ‘standard’ or ‘quality’ that a consumer could reasonably expect from an environmentally friendly product. For any of these infringements a consumer could lay a complaint with one of the various bodies. If laid with the Consumer Commission or Tribunal, they would be able to issue an order forcing the organisation to either pull the product or service, or force them to correct any advertisements, packaging or representation. The Commission or Tribunal could also fine the organisation up to R1 000 000 for the infringement. If the organisation fails comply with an order from the Tribunal or Commission they could face further fines and a prison sentence of up to 10 years. However it must be borne in mind that the provisions that give the consumer these powers are not yet in effect.
Specific Greenwashing Provisions and Standards
The last aspect this opinion was asked to advise on was the possibility of inserting or amending the CPA to contain specific anti-greenwashing provisions. Since the CPA has already been signed into law, no further amendments can be made to the current act.
However it would be possible to petition the Minister of Trade and Industry to include the provisions in an amendment or regulations for the Act. This is a cumbersome and very lengthy process and is not in our opinion recommended.
However the CPA makes provisions for the creation of consumer protection groups (s78) and industry codes (s82).
A consumer protection group has the power to undertake any act to protect the interests of a consumer individually, or of consumers collectively, intervene in any matter before any forum contemplated in the CPA and finally it can direct a generally stated concern or complaint to the Commission in respect of any matter within the purposes of the CPA. As such, one could establish a consumer protection group whose purpose is to protect consumers from greenwashing. The means to create such a group are relatively simple, all one would have to do is create an association or company with the stated purpose of protection consumers against greenwashing. In order for s78 to apply to the association though, it would need to be accredited by the Minister of Trade and Industry. Currently the means for accreditation, as well as the standards and procedures have not yet been published.
Industry codes regulate the interaction between persons operating in a specific industry.
Theoretically one could establish an industry code that prohibits greenwashing for specific industries which are particularly guilty of using it in their marketing. The means of establishing an industry code have not yet been published so we cannot advise you on how to do it. However the CPA does make provision for a consumer to propose the Commission to investigate and make recommendations for industry codes. When the Commission is eventually established you could propose that they investigate and create industry codes against greenwashing.
The ASASA code of conduct and CPA has ample provisions for consumers or concerned bodies to lodge complaints and take action against organisations that greenwash. While most of the provisions of the CPA are yet to take effect the ASASA code can be used in the interim to at least prevent the most blatant greenwashing attempts. In order for there to be an effective movement against greenwashing it would be prudent to establish a consumer protection group to help consumers make complaints and force organisations to practice better marketing strategies. The consumer protection group could also lobby the government to create industry codes against greenwashing. While the consumer protection group could not be accredited yet, it could still start laying complaints and act as a watchdog against organisations that greenwash until the regulations that will provide for the accreditation process is published.
MCES invites you to put your name forward so that we may utilise your assistance in establishing a Consumer Protection Group – please send an email to firstname.lastname@example.org expressing your desire to join such an initiative.
Thank you we look forward to hearing from you.