Greenwash and the Consumer Law Reform Bill

I sit on the Commerce Select Committee and we have been covering the Consumer Law Reform Bill which has just been reported back to the house. This Bill, which proposes the most significant changes to consumer laws in more than 20 years, is a substantive and complex piece of legislation which updates a number of laws including the Consumer Guarantees Act (CGA) and the Fair Trading Act (FTA).

Despite intensive lobbying from big businesses, our committee  recommended further substantive changes to the Bill:

  • Tripling the penalties for breaches of the FTA
  • Compulsory interview powers for the Commerce Commission so people have to answer their questions
  • Provisions preventing unfair contract terms in standard form contracts
  • Protections that will now cover all transactions between traders and consumers including auctions which were previously excepted

Most significantly for conscious consumers, the Bill proposes a prohibition on making “unsubstantiated representations”. This is a biggie as it means that the onus of proof about a claim will shift from the Commerce Commission onto the business instead. Businesses will have to prove the claims that they make about their products are true. We think this is really important so that consumers can be confident that their decisions to buy products for environmental reasons for example, are based on the truth.

Fairtrade demonstrate what greenwash is pretty cleverly with this image.

Unsurprisingly this change was strongly opposed by many businesses who basically argued that it would be too expensive to require them to provide evidence for their claims – a weak augment that the committee rightly rejected.

However we did take on board concerns about the possible impact on advertising creativity by making it clear that the provision does not cover representations that a reasonable person would not expect to be substantiated. I am sure that the promoters of a certain high profile product will be relived that they do not have to provide evidence of wing growth!

In the committee stages I will be pushing hard to ensure that the Bill retains all of these clauses, and for the prohibition on unsubstantiated representation to be strengthened by giving the Commerce Commission the ability to issue power of substantiation notices, as is the case in Australia.

5 Comments Posted

  1. Hi Dave and others,

    In response to the concerns you have raised about the interview powers.

    They are needed to deal with the situation we currently have where some businesses just avoid providing information that the Commerce Commission needs to do their work.

    The safeguards against the concerns that you have raised are that:

    a) The powers only apply to investigations of serious offenses,
    b) The person being interviewed is protected from their statements being admissible ( except for perjury charges), if the case was to proceed to a court.

    These compulsory interview powers are needed to assist the Commission with obtaining documents and information that will allow them to properly investigate a company in a timely and cost effective way

  2. The right to remain silent is being reduced so police can require people to answer their questions – are we to have less rights than commercial organisations, or will we be treated the same?

  3. Please forgive (and ignore, if you like) this post, as it’s not really a Green issue. But it does relate to labelling, which is..
    I’ve been buying (for ages) doritos corn chips which according to the nutri panel have 13g/100 of protein. Turns out it’s a typo and they only have 8g/100 (like the rest). They’re gonna send me a voucher for 3 packs but I’m still a bit peeved. Is that fair compo?

    BTW, I agree with Dave re the right to silence shouldn’t be removed, but if they don’t even try to defend something then the commerce commision could make inference from that.

  4. Hmmmm… Dave has a point here.

    I’d not want to have an unfettered limitation on the “right to remain silent”, though I might consider that a limit to that right is warranted in some situations. However, I’d want those to be well defined, limited and justified. Right now there is only the bare point.


  5. re: Compulsory interview powers for the Commerce Commission so people have to answer their questions

    The right to remain silent, when accused of wrong-doing, is so old that it’s hard to find out when it was first enshrined in common law. Why do you think it should be removed now?

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