At the Senate inquiry into greenwashing public hearing in Canberra this week, Australian Organic Limited (AOL) called for harsher penalties on companies found to be misleading consumers.
AOL CEO, Niki Ford, said that since the organisation’s original submission in May 2023, the Australian Competition and Consumer Commission (ACCC) launched its inquiry and carried out two internet sweeps, and a review of 247 businesses that found 57 per cent had made potentially misleading or deceptive environmental or sustainability claims.
But Ford said the ACCC report fell short in effectively deterring business from making misleading claims of being ‘organic’ without legitimate certification.
“AOL would like to see the outcomes of the ACCC inquiry strengthened so that significant consequences are imposed on anyone making unsubstantiated claims around sustainability,” Ford said.
“Without penalties that outweigh the benefits of using terms like ‘organic’ as marketing tools, mere guidance will not resolve these issues. The ACCC has highlighted the requirements to avoid greenwashing, so it is crucial to enforce these guidelines in a manner that significantly impacts organisations choosing to disregard them.
“AOL is urging severe ramifications to deter operators from engaging in repeated greenwashing.”
Still no Australian standard for organic products
Australia is the only OECD country without a domestic standard for organic products, meaning a product can be labelled organic with little to no verification.
Some uncertified organic products contain as little as two per cent organic ingredients, Ford said.
The AOL said lax labelling laws are the main contributor to consumers still citing trust in a product’s organic status as a barrier to purchase. Its 2023 Australian Organic Market Report found 33 per cent of organic shoppers surveyed purchased a product thinking it was organic based on packaging claims, only to find out later it was not.
“There are currently over 2000 businesses in Australia claiming to be organic that are not certified, with no way for consumers to verify the authenticity of their claims,” Ford said.
“This jeopardises the efforts of producers who have gone through the rigorous third-party organic certification process, proving how they promote biodiversity and encourage soil regeneration with natural alternatives to synthetic fertilisers and pesticides.
She said the while the ACCC requires any operator making organic claims to be able to support them, there is “little to no action taken on businesses which are selling misleading products”.
“Current regulatory measures are inadequate to deter the mislabelling of organic products. Until the laws are changed to stop uncertified operators marketing their product as ‘organic’, even the most discerning consumers will continue to be misled by businesses unscrupulously using the term.
“This creates confusion for consumers and the broader industry and dilutes the certification process as the term ‘organic’ becomes a marketing ploy used by uncertified operators to greenwash their products based on organic’s reputation as sustainable and environmentally friendly,” she said.
More information on the Senate inquiry into greenwashing here.
