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Federal Trade Commission to review need for federal guidance on 'green' advertising claims.

Federal Trade Commission To Review Need For Federal Guidance On |Green' Advertising Claims

INDA testifies on behalf of nonwovens industry at recent FTC hearing; urges commission to establish guidelines for |green' advertising In a move anticipated for some time, the U.S. Federal Trade Commission (FTC) has announced that it will review the need for federal "guidance" regarding environmental advertising claims being made by certain manufacturers. As part of this review, the FTC held hearings on July 17, 18 in Washington, D.C.

To represent the nonwovens industry's position on the issue, INDA testified before the FTC on July 18. Its testimony is based on the comments and opinions of INDA members expressed during a July 1 emergency meeting convened in Washington, D.C. to develop a formal position on the matter.

Attending the July 1 meeting were representatives from Clopay, Courtaulds Fibers, Dexter Nonwovens, Fiberweb North America, Kimberly-Clark and Veratec. As a large consumer of nonwoven fabrics used in the production of disposable diapers and other consumer goods, a representative of Procter & Gamble also attended the emergency meeting and contributed to INDA's testimony.

This article summarizes the FTC action and includes the testimony INDA presented on July 18.

Gauging A Need For Federal "Guidance"

The FTC has primary jurisdiction over consumer marketing issues. One of its principle functions is to safeguard the public from false or deceptive advertising of consumer products. To accomplish this, the FTC has a number of general rules regarding what can and cannot be claimed by manufacturers advertising their products.

During the 1980s the FTC was not noted for vigorous enforcement of these rules and, lacking federal leadership, several state and local governments enacted their own laws regarding "green" advertising claims that apply to products sold within their separate jurisdictions. In addition to those states and local governments, a number of others are currently considering similar measures.

This has resulted in a multiplicity of regulations that poses a significant burden on manufacturers that will only increase as more and more state and local governments take action.

Without federal guidelines, INDA is concerned that dozens of states and local governments could eventually adopt separate regulations. Facing a multitude of potentially conflicting regulations, INDA is concerned that manufacturers will decide not to advertise environmental attributes at all.

This concern is shared by members of Congress, representatives from state governments that are considering legislation and numerous manufacturers who sell products around the country. All of these groups and others have requested that the FTC establish guidelines so that a more "national" approach can be taken on the issue.

The FTC has responded to these requests by formally agreeing to review the need for Federal guidance and by holding public hearings to increase awareness of the issue. Material presented during these hearings will likely become the basis of the federal government's action on the matter for the foreseeable future.

Proposed Guidelines

If the FTC decides that additional federal action is needed, one of its most attractive options would be the establishment of interpretive guidelines that manufacturers could follow if they wish to make environmental claims. Other options available to the FTC include the development of additional new rules that specify exactly what language constitutes deceptive environmental advertising (and therefore cannot be used) or increased enforcement of rules already on the books. For various reasons, neither of these two options is as attractive to the FTC and to industry as the development of guidelines.

Guidelines are most attractive because they would be voluntary and could be easily revised to address technological advances or other future needs. Also, while guidelines will not preempt state or local laws, they would serve as a model for state legislatures considering action.

Since guidelines are such an attractive option, several groups have already submitted proposed ideas for FTC consideration. In fact, two of these proposals are actively being reviewed by the FTC and could provide the basis of its action on the issue.

One of these proposals was contained in the recently-released "Green Report II: Recommendations for Responsible Environmental Advertising," produced by a task force of Attorneys General from 11 states. While this proposal has some good suggestions, INDA will not endorse it due to two specific areas of concern: recommendations that deal with composting claims and recommendations regarding general claims that can be made by manufacturers of single-use products.

With composting, recommendations contained in the Green Report II would forbid "compostability" claims for any product sold nationally unless a significant amount of that product is being composted everywhere the product is sold. In addition, the report recommends that even those disposable diapers that could be labeled "compostable" should explicitly state that the diapers should not be composted in most commercial composting operations due to "health and sanitation problems." INDA believes that these recommendations will discourage additional development of composting programs since consumers will not be aware that disposable diapers could be composted if the necessary facilities existed in their area.

INDA is equally concerned about a recommendation contained in the Green Report II that would forbid manufacturers of single use products from claiming that their products "impose no burden on the environment." INDA believes that all products impose some burden on the environment either in their manufacture, use or disposal and that it is unfair and unreasonable to forbid manufacturers of one category of products (disposables) from making claims that can be made by manufacturers of another category of products (reusables), even though both categories present some kind of an environmental burden.

NFPA Proposal

Another proposal under consideration by the FTC was prepared by the National Food Processors Association (NFPA) in conjunction with 10 other trade associations.

In INDA's opinion, the NFPA proposal better balances the rights of manufacturers to truthfully communicate the environmental attributes of their products with well-reasoned recommendations to help eliminate advertisements that are truly deceptive.

With claims of compostability, for instance, the NFPA proposal states that such claims would be allowable for disposable diapers if the manufacturer has reliable evidence that the diaper can be processed in municipal solid waste facilities and that materials in the diaper are either compatible with compost intended for soil applications or can be screened from the final compost. Since such composting facilities do exist, a compostability claim could be made--even though an acceptable facility might not be located in the same area where the diaper is sold.

INDA's Response And Testimony

To formulate its response to the FTC action, INDA convened an emergency meeting on July 1 for representatives of its Disposability Committee, its Government Relations Advisory Board and other members with an interest in the issue.

During this meeting an outline of INDA's testimony to the FTC was adopted and a draft based on that outline was later approved by those who attended the meeting. Following is the full text of the testimony presented on INDA's behalf:

INDA, Association of the Nonwoven Fabrics Industry, thanks the Federal Trade Commission for this opportunity to express our views on the subject of green advertising and the need for additional federal guidance on the issue.

INDA is the recognized international trade association of the nonwoven fabrics industry. Nonwoven fabrics are a multi-billion dollar industry in the United States and are used in the manufacture of numerous consumer items, including, among other things, disposable baby diapers, adult incontinence products and feminine hygiene products.

INDA has more than 100 general members, many of whom specialize in the production of component products used in the manufacture of consumer goods or in the manufacture of consumer goods themselves. Attached, for your information, is a list of INDA members.

Need For FTC Action

After thoroughly reviewing the issue, INDA strongly believes that federal guidance on environmental advertising claims is needed as soon as possible. INDA is concerned that the multiplicity of state and local environmental advertising laws and regulations is inhibiting the ability of companies to truthfully communicate with consumers.

Faced with the need to comply with numerous conflicting state and local restrictions on what can and cannot be contained in environmental marketing messages to consumers, some industry members will shy away from communicating any environmental messages at all--a situation which, in INDA's opinion, will not serve the public good.

INDA also believes that the current situation causes confusion in the market place and interferes with truthful communications by manufacturers of the legitimate environmental benefits of the products they produce. This in turn interferes with efforts to educate consumers and efforts to encourage broader interest in, and action on, environmental issues.

For this reason INDA encourages federal guidance on the issue. We also believe that the FTC, as the federal agency responsible for overseeing advertising standards, is uniquely suited to the task.

While INDA would prefer a single, national standard that preempts inconsistent state and local restrictions, we understand the difficulty and time involved in promulgating rules with preemptive effect. INDA believes that faster federal action is needed than is available through the adoption of trade regulations. Furthermore, even without preemptive effect, INDA believes that FTC guidance would serve as a model that state and local governments should be encouraged to adopt and would also offer some sort of sanctioned criteria for both manufacturers and consumers.

Therefore, having weighed the FTC's options for action outlined in the May 31, 1991 Federal Register notice, INDA supports the adoption of voluntary guidelines based on certain general principles.

General Principles For Federal Guidelines

Overall, INDA supports adoption of federal guidelines that establish reasonable standards to assure that environmental advertising claims are truthful and not misleading. However, INDA opposes any guidelines that incorporate requirements or impose restrictions that go beyond "truth-in-advertising" principles. INDA does not support advertising guidelines that become, in effect, environmental policy-making biased against single use or other types of products.

For this reason INDA opposes FTC action that would result in a blanket ban on the use of any environmental term or terms (including those that are not specifically listed in any guidelines adopted by the FTC).

INDA also specifically requests that the FTC reject any proposals that exclude the right of a category of products--especially single use products--to advertise their environmental benefits in a truthful fashion.

Otherwise, INDA supports federal guidelines that are based on the following general principles:

* Guidelines must be consistent with accepted principles of advertising regulation and must be in keeping with the parameters of the First Amendment as applied to advertising.

* Guidelines should allow truthful environmental claims by all advertisers. They should not incorporate narrow definitions of commonly understood terms or bar the use of specific terms; the FTC should instead look to the context in which the claim is made.

* Guidelines should be flexible so that they are able to keep pace with technological evolution in this era where technological change in the science of solid waste management is so rapid.

* Efforts should be supported by national, consensus-based standards-making bodies to develop related standards, based on objective test methods, to determine when products are "degradable," "biodegradable" and "photodegradable." Adoption of guidelines by the FTC should not be delayed until these standard test methods are developed, however.

* Environmental claims should clearly relate to the specific product being advertised, the package containing the product or, when appropriate, both.

INDA believes that advertisers should be permitted to use terms such as "compostable" and "recyclable" if commercially practiced technology exists. INDA realizes that composting and recycling facilities are not universally available and would therefore encourage advertisers to consider qualifying language such as "this item is compostable/recyclable where facilities exist. Ask about composting/recycling in your area." INDA is concerned that more stringent limits on the ability to make such claims could hinder consumer interest in and demand for the establishment of additional composting and recycling facilities.

INDA also believes that advertisers who make environmental claims on product labels or in product advertising should put those claims in context to assure that they are not misleading. INDA strongly believes, however, that advertisers should not be forced to say more than necessary to place claims within context. The extensive explanatory language recommended for "recyclability" claims in the Green Report II, for instance, is far more than necessary to assure that the claim is not deceptive. The FTC should reject such recommendations as not in keeping with established First Amendment jurisprudence.

Finally, INDA has several concerns regarding life cycle analysis (LCA) programs and "green seal" advertising programs.

INDA believes that LCA programs provide valuable, data-based information on the overall environmental effects of materials, products and packages. This information reminds us that all manufactured products have some impact on the environment and is helpful to manufacturers who are trying to focus on specific areas where they can improve the environmental impact of their products.

INDA does not believe that current LCA methodology is sufficiently developed, however, to offer consumers an integrated way to assess which materials, products, and/or packages are "environmentally superior." INDA agrees that a suitable methodology for conducting LCA programs must be developed and is aware that qualified experts are already working on the issue. INDA supports the continuation of these efforts.

In regard to so-called "green seal" advertising programs, INDA is particularly concerned that programs designed to "certify" the general environmental superiority of certain products raise a special concern about deceptiveness to consumers. INDA does not believe that consumers can be fully aware of the many decision points and policy issues reflected by a green seal such as: 1) eligibility requirements that may exclude certain products outright, no matter what environmental attributes they may offer; 2) the environmental criteria used by the program; 3) funding received by the program; and 4) the qualifications, orientations and biases of the personnel conducting these programs. We, therefore, urge the FTC to carefully consider these issues when evaluating the benefits of green seal programs in the context of these federal guidelines.

Based upon careful consideration, INDA has concluded that the guidelines proposed by the National Food Processors Association (NFPA) are generally consistent with our general principles on supporting truthful and legitimate green advertising claims. In addition, we are impressed by the broad base of support that the NFPA proposal has received.

For these reasons, INDA encourages the FTC to adopt the NFPA proposal as the basis of federal guidelines and to encourage state and local entities to follow suit.

Finally, no matter what action the FTC elects to take on this issue, INDA strongly encourages the Commission to oppose the "Single Use Products" recommendation (Section 3.2) of the Green Report II. INDA believes that all manufactured products have some impact on the environment (whether that impact comes from their manufacture, use or disposal) and that all manufacturers should be entitled to compete in the market by truthfully describing and advertising all the various benefits of their products. Consumers in the market place are then best able to determine for themselves which products offer the best combination of convenience, value and environmental attributes. The recommendation contained in the Green Report II would remove the ability of consumers to make educated purchasing decisions based on complete information and would therefore unfairly favor one class of products--reusables--over another--disposables. This proposal should therefore be rejected by the FTC.

INDA applauds the FTC's efforts on this issue and looks forward to working with the Commission to help ensure that consumers are provided with the information they need to make educated, rational purchasing decisions.

Peter Mayberry is the director of government affairs for INDA, Association of the Nonwoven Fabrics Industry. He works out of the Washington, DC offices of Keller & Heckman, INDA's legal counsel. This Capital Comments column appears monthly in NONWOVENS INDUSTRY.
COPYRIGHT 1991 Rodman Publications, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
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Article Details
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Author:Mayberry, Peter
Publication:Nonwovens Industry
Article Type:column
Date:Aug 1, 1991
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