Plastic bag company fined for misleading green claims

A New Zealand plastic bag manufacturer has been fined $30,000 in the Auckland District Court after making environmental claims that were liable to mislead, thus breaching the Fair Trading Act. Pacrite Industries pleaded guilty to 10 charges in relation to claims about the oxo-biodegradability and environmental friendliness of its plastic rubbish bags, marketed as ‘Greensac’ or ‘The Green One’.

The company claimed the bags, which contain an additive that makes them oxo-biodegradable, were better for the environment than conventional plastic bags, with its advertising stating or implying the bags would oxo-biodegrade in a landfill. The claims were made on the bags themselves, the company’s website, in brochures provided to retailers and in media releases.

An investigation by the Commerce Commission found that while it is technically true that oxo-biodegradable plastic bags can break down in a laboratory, the representation that the bags would undergo this process in the real world was liable to be misleading. This is because the bags, used for household rubbish, would predominantly end up in landfills and, once covered over, the vast majority of bags will not oxo-biodegrade because the process relies on sufficient oxygen to break down the bags.

In sentencing the company, Judge Collins said traders who wish to market their products based on environmental advantages have a responsibility to ensure the product can live up to the claim. He noted that Pacrite’s whole branding was based on the product’s environmental advantage - an issue which is becoming increasingly important to society.

Commerce Commission Head of Investigations Ritchie Hutton said New Zealanders “care about their environment and will be influenced by marketing claims of environmental benefits”, so it is “important that consumers are able to rely on those claims”.

Hutton said the bags “are not markedly better for the environment than conventional bags” because the only way that they can break down “is if they are left lying around above ground, exposed to oxygen, or, potentially, if they remain in the surface layers at the landfill”.

The bags are no longer being manufactured and Hutton said the commission is pleased with the outcome.

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