AUSTRALIA | The Federal Court has ordered Clorox Australia Pty Ltd (Clorox) to pay a total penalty of AUD 8.25 million for making false or misleading representations to consumers that certain GLAD kitchen and garbage bags were partly made of recycled ‘ocean plastic’, following court action by the ACCC.
Clorox admitted that, between June 2021 and July 2023, it breached the Australian Consumer Law by claiming that the packaging of its GLAD to be GREEN “50 percent Ocean Plastic Recycled” Kitchen Tidy Bags and Garbage Bags products contained at least 50 percent recycled plastic waste collected from the ocean or sea, when this was not the case. More than 2.2 million products were supplied in this packaging over this period.
Rather, the products were made from about 50 percent plastic waste collected from communities in Indonesia with no formal waste management systems, situated up to 50 kilometres from a shoreline, and otherwise from non-recycled plastic, processing aid, and dye.
“Claims about environmental benefits matter to many consumers and may impact their purchasing behaviour. When those claims are false or misleading, this is a serious breach of trust, as well as the Australian Consumer Law,” said ACCC Chair Gina Cass-Gottlieb.
“This is also a significant matter because consumers have limited or no ability to independently verify the accuracy of the claims made on packaging and it also disadvantages competitors who are accurately communicating their environmental credentials.”
“We consider this penalty is appropriate in this case where Clorox gave insufficient consideration to what ‘ocean plastic’ meant to an ordinary consumer, particularly in light of the blue colour and wave imaging on the packaging, “ she added.
The Court held that these features “connoted a relationship between the Products and the ocean” and the “reference to ‘green’ on the Packaging connoted environmental-friendliness,” and that these were “important contextual matters in assessing the contravening conduct”.
It was also observed by the Court that “there is a particular societal harm that arises when conduct undermines consumers’ confidence in environmental claims”, adding that the “development of products that minimise adverse environmental impacts is beneficial” but “[e]nvironmental claims are useful for consumers only if they are accurate.”
Clorox was also ordered to set up an Australian Consumer Law compliance program, publish a corrective notice on its website, and pay part of the ACCC’s legal costs, among other orders.
“While the ACCC encourages businesses to innovate and offer environmentally sustainable products, businesses need to be clear and accurate when making representations about them. We take allegations of greenwashing extremely seriously and will continue to monitor claims made by businesses and, where appropriate, will take enforcement action on misleading environmental claims.”
Clorox cooperated with the ACCC during its investigation and legal proceedings, made admissions, and agreed to make joint submissions to the Court, including on the appropriate total penalty and other orders.
Clorox discontinued the products in July 2023 after it became aware that the ACCC had started investigating, but before the ACCC commenced these proceedings.
