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What is “Green” - the ACCC Legal Implications and Certification

Jean Cannon

Managing Director, Enviro Action
PO Box 4074, Norwood South SA 5067 Ph1300 88 3646


There is a growing consumer demand and a lot of confusion about what “green” really means. This is spawning a wide range of so called environmental certifications. These are product certifications. There are difficulties getting them audited and confusion about what they all mean. The Australian Competition and Consumer Commission (ACCC) is investigating this now and also investigating carbon credits and carbon neutral certification.

The internationally recognised standard for environmental management is ISO 14001. The difference, other than auditing body credibility is that ISO 14001 is certification of the management practices and life cycle. So while a product may be certified green by some organisation ISO 14001 certifies that the business you are buying from has considered all its significant environmental impacts, including product and energy impacts of obtaining and handling all the products and services and can demonstrated that these are managed in a sustainable manner. ISO 14001 also brings real benefits to the individual business by increasing its efficiency and improving its environmental impacts


Consumers are waking up to the need to look after the environment and marketers are jumping madly on the bandwagon. Marketers sell on emotion and so they often stretch the truth to build that very emotion that connects with the buyers. It is their job.

Up to 50% of Australians will now investigate the origins of a product or service, and will pay more for a product that they believe is from a sustainable source. This is the crux of the problem. THEY BELIEVE it is sustainable.

The Australian Competition and Consumer Commission (ACCC) has launched a crackdown on green claims with the release of its guidelines, Green Marketing and the Trade Practices Act, in November 2007. Under the act, there is maximum fine of $1.2 million for companies engaging in misleading and deceptive conduct.

The ACCC is already taking court action against car manufacturer Saab. Saab, being Swedish actually has a fairly green production and management system but the marketers went too far.

Woolworths has changed its packaging of Woolworths Select tissue products after an ACCC probe. An ACCC spokesman says that while large companies have been targeted so far, smaller businesses will be the subject of future investigations. That includes all of us.

Businesses need to collect data and document their “green” credentials. Are they themselves green or only selling green products and do they really know that their “green” products are truly green. Some of the data collected can be as simple as recording before and after electricity and fuel bills showing energy use clearly. You can buy simple meters to measure power use. They also need to consider their supply and distribution chain.

For food producers the traceability aspects of this is probably already beginning to be noticed and the food safety and environment recording can and should be fully integrated because this saves you time. Never duplicate things. Chemical diaries would be the major area here with a chain of one up, one down responsibility coming in for all exports if you haven’t already go this yet. It has hit all seafood exports already and some on my clients who manufacture feed for the aquaculture industry have been finding a challenge with traceability of grains because of the pooling.

Claims must be able to be backed up with records and facts. “Greenwashing” is really fraud.

The ACCC guidelines warn against using vague phases, such as green, safe for the environment, environmentally preferred, energy efficient and recyclable, which could mislead consumers. They also dislike the use of environmental images to evoke a positive environmental reaction.

We are now seeing a plethora of new “standards” developing. But what do they mean? How separate are the organisers and auditors from the participants in the scheme? How meaningful are they?

Green product standards include Good Environmental Choice Australia (GECA), Greenhouse Friendly, Eco-Buy and EcoSpecifier. This is all very vague and confusing. Who really knows who audits these “standards”, how rigorous they are and where they are recognised.

The standards do not necessarily overlap and consumers are confused. There is a perception that “organic” is safe and environmentally friendly food but the certification does not always cover all the significant environmental impacts and it was a lack of separation of manures and water supply that caused the Nippy’s Orange Juice food poisoning incidents because contaminated water was used to wash the oranges. I was in the supermarket the other day when I heard someone ask why some bananas have red tips. The shop assistant told her they were organic bananas when in fact; they are grown on an ISO 14001 farm.

It is far more satisfactory to say, as so many overseas brands do, “produced by an ISO 14001 certified business” than trying to dream up various new standards.

I think we all know about the wide range of EMS (environmental management system) in Agriculture programs. These had a large budget, took a lot of work and were done by very well meaning people. But how many of them really delivered a rigorous EMS or were many of them EM and some only a dab of E?

I was invited to train as an auditor for one of the meat industry groups and I was one of only two who were actually qualified auditors. There was no concept of conflict of interest, people were auditing businesses they were personally involved in and the entire process was actually just ticking off a simple checklist. It was NOT certified green meat, nor was it certified green management practices. There was no consideration of the bigger picture including the larger environmental impact of the operations and lifecycle of the inputs and outputs – both product and waste.

Once we get into carbon, we come up with another “bag of worms”. The ACCC is set to release additional guidelines in the coming months for claims relating to carbon offsets, representing a reduction of greenhouse gases, and carbon neutrality, where the carbon emissions of the company or a product or service are negated by offsets. Interestingly, if you look on the web the airlines vary enormously in their reporting of the greenhouse gas emissions of the same aircraft flying the same route and in fact it does vary every trip depending on things like loaded weight, weather condition and time spent circling airports because of air traffic congestion.

The issues include the integrity of carbon offsets and measurement of the initial carbon emissions. A common mistake people make is to claim carbon neutrality for a product when the company has only considered emissions during manufacturing and not the total life cycle, which includes use and disposal. And this does not even touch on some of the tree planting practices to claim carbon credits. Some schemes are well run but others are not.

One company that decided to go carbon neutral in 2006 was a design and print company and the ACCC forced them to rethink the total life cycle of its services. The printers were prepared to discuss the soy-based, biodegradable inks in the printing factory in Melbourne when measuring the company’s environmental footprint, but were surprised that the source of the paper was also questioned.

Last year I assisted a fishing industry group that developed its own standard and was funded by FRDC to do so. They registered their standard with Standards Australia’s SAI Global who audited it and found that it did not stack up as a standard that would be able to be audited against. That is where I came in to help them pass the audit as a standard even before they start auditing their member organisations. Are all the other product standards actually checked with Standards Australia?

The internationally accepted and recognised standard for environmental management is ISO 14001. This is the only standard we should be thinking about for certifying whether a business is managed in an environmentally sustainable way. It requires you as business people to identify all your activities and impacts as well as the legislation and regulations that apply to you. You need to be able to demonstrate that you do everything a “reasonable person” can be expected to do the ensure that you and all your employees, including contractors, comply with the law. They identify and systematically analyse the actual and potential impacts of all their activities and also of emergency situations.

This is particularly important on farms where the home-life of families and the workplace are mixed and kids grow up helping. Some if the interested parties who could be impacted on, or cause the environmental impacts may well be your children and their friends who visit.

Your next step is to develop and monitor a management system with feedback to control these environmental and legislative risks and to keep this compliance up to date with effective feedback loops and continual improvement.

You build in an effective feedback loop which includes recording problems including minor incidents and near misses you can learn prevention from and internal auditing. Additionally, for certification you pay an independent qualified third party auditor to check that what you say they do complies with the standard and that you actually do what you say.

This is real and effective green management!

And it does not have to be difficult. The trick is to put a lot of effort into identifying and analysing all the potential and environmental impacts and what resources are needed to management them. Then build a well designed slimline system to control those impacts. This is a bit like an iceberg with only a small amount showing. This means that the day to day working system does not need to add a lot of overheads to the business. And you do not need to duplicate records and instruction. Keep it simple.

ISO 14001 is the internationally recognised standard for environmental management. The difference, other than auditing body credibility is that ISO 14001 is certification of the management practices. So while a product may be certified “green” by some organisation; ISO 14001 certifies that the business you are buying from has considered all its significant environmental impacts, including product and energy impacts and it can be demonstrated that these are managed in a sustainable manner.

Another standard that is used in the fishing industry is the Marine Stewardship Certification (MSC). This is a product standard that certifies that the fishery itself is sustainable. It is very expensive to audit, more so than in the North Sea where it was developed because our fisheries have a much greater diversity, in part because they are not so overfished. It has no impact on the on-boat and in-shed practices of each fisher. I am currently working with a fisher from an MSC fishery who is doing ISO 14001 because she wants the business improvement that comes from ISO 14001. She told me that the MSC is “the certification you do if you don’t really want to be certified”. It is needed if you want to sell fish to the Sainsbury’s chain of supermarkets in the UK and developed by them jointly with the World Wildlife Fund (WWF).

For benefits to both your business and to the environment, you should be doing ISO 14001. And it does not have to be really difficult. It takes careful planning and the better you do this the better your system works for you. For more information visit

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