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US-based consumer products company Clorox’s Australian subsidiary has been ordered to pay $8.25 million after the Federal Court found the company made false claims that a range of its GLAD-branded garbage bags were made from 50 per cent recycled “ocean plastic”.
The greenwashing case, brought by the Australian Competition and Consumer Commission (ACCC), has been described by the regulator as a serious breach of trust by the company which produces a range of storage and waste bags, food wraps and cleaning products under the GLAD, Chux and Clorox brands.
Clorox Australia admitted that, between June 2021 and July 2023, it breached the Australian Consumer Law by incorrectly claiming on the packaging of its GLAD to be GREEN “50% Ocean Plastic Recycled” Kitchen Tidy Bags and Garbage Bags that the products were made of at least 50 per cent recycled plastic waste collected from the ocean or sea.
The ACCC says more than 2.2 million products were supplied in this packaging over this period.
Instead of being made from about 50 per cent plastic waste from ocean plastics, the products were produced from plastics collected from communities in Indonesia with no formal waste management systems.
The communities were situated up to 50 kilometres from a shoreline, and the product was sourced with non-recycled plastic, processing aid and dye, the court was told.
“Claims about environmental benefits matter to many consumers and may impact their purchasing behaviour,” says ACCC chair Gina Cass-Gottlieb.
“When those claims are false or misleading, this is a serious breach of trust, as well as the Australian Consumer Law.
“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.”
The Federal 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”.
The court also heard that “there is a particular societal harm that arises when conduct undermines consumers’ confidence in environmental claims”.
An example presented to the court by the ACCC showed that between June 2021 and about 13 November 2022, the packaging of Clorox’s small, medium, and large Kitchen Tidy Bags included the statements “50% Ocean Plastic Recycled Bags”, and “Made using 50% Ocean Plastic*’ around an image of a wave, overlaid on an image of a blue coloured waste disposal bag.
The asterisk pointed to a note that said: “*Made using 50% ocean bound plastic that is collected from communities with no formal waste management system within 50 km of the shore line.”
The back of the packaging also carried the following statement: “These bags are made from 50% ocean recycled plastic, and have the trusted strength of Glad® to hold household waste on its way to landfill. Recycling ocean bound plastic reduces plastic pollution before it enters the ocean, helping to reduce pollution in waterways, save marine life and put an end to irresponsible waste.”
Clorox discontinued the products in July 2023 after it became aware the ACCC had started investigating, but before the ACCC commenced the Federal Court proceedings.
In addition to the penalty, the Federal Court ordered Clorox to establish 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,” says Cass-Gottlieb.
“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.”
The ACCC says Clorox cooperated with the ACCC during its investigation and the legal proceedings, made admissions, and agreed to make joint submissions with the ACCC to the court, including on the appropriate total penalty and other orders.
In response to the Federal Court findings, Clorox tells Business News Australia that 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 company says.
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