BILL ANALYSIS Ó AB 837 SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator S. Joseph Simitian, Chairman 2011-2012 Regular Session BILL NO: AB 837 AUTHOR: Nestande AMENDED: June 7, 2012 FISCAL: Yes HEARING DATE: June 18, 2012 URGENCY: No CONSULTANT: Randy Pestor SUBJECT : FOOD CONTAINER MARKETING CLAIMS SUMMARY : Existing law : 1) Under the Biodegradable and Compostable Plastic Bags Law (Public Resources Code §42355 et seq.) and Plastic Food and Beverage Containers Law (§42359 et seq.), prohibits products from being sold that are labeled "compostable" or "marine biodegradable" unless they meet certain American Society for Testing and Materials (ASTM) standards. Certain related provisions, including definitions and penalties, are specified. These provisions sunset January 1, 2013, and on that date the Plastic Products Law (§42355 et seq.) becomes effective and similar provisions apply to various plastic products. 2) Authorizes any person who engages, has engaged, or proposes to engage in unfair competition to be enjoined in any court of competent jurisdiction. (Business and Professions Code §17203). Actions for any relief may be by a person who has "suffered injury in fact and has lost money or property as a result of the unfair competition." (§17204). 3) Under provisions relating to Environmental Representations Law (§17580 et seq.): a) Requires any person who represents in advertising or on a label that the consumer good it manufactures or distributes is not harmful to, or is beneficial to, the natural environment through the use of certain terms (e.g., "ecologically friendly," "earth friendly," "green AB 837 Page 2 product,") or any like term, to maintain in written form certain information and documentation supporting the validity of the representation. This information and documentation must be furnished to the public upon request. b) Prohibits any person from making any untruthful, deceptive, or misleading environmental marketing claim. For purposes of this provision, "environmental marketing claim" must include any claim contained in the "Guides for the Use of Environmental Marketing Claims" published by the Federal Trade Commission. c) Provides that any violation of the above requirements is a misdemeanor punishable by imprisonment in the county jail not to exceed 6 months, or by a fine of no more than $2,500, or both. This bill adds requirements to the Plastic Products Law relating to plastic food container products that: 1) Require any manufacturer or supplier making an environmental marketing claim relating to recycled content of a plastic food container product to maintain information and documentation in written form in its records supporting the claim that: a) The recycled content for materials has been recovered or otherwise diverted from the solid waste stream either during the manufacturing process (preconsumer) or after consumer use (postconsumer). b) The recycled content claim conforms with the uniform standards for recycled content contained in the Federal Trade Commission Guides for the Use of Environmental Marketing Claims. 2) Require the above information and documentation to be furnished to the public upon request or provided by furnishing a link to a document on its Internet Web site containing the information and documentation. AB 837 Page 3 3) Define "plastic food container product" to be a product made of plastic that includes a tray, clamshell container, or other receptacle that is used, or intended to be used, to hold food. 4) Provide that the above requirements do not limit requirements under the Plastic Products Law or any other provision of law. 5) Sunset January 1, 2018. COMMENTS : 1) Purpose of Bill . According to the author, "AB 837 simply promotes truth in advertising, i.e. stops the practice of 'greenwashing.' Consumers value products with an environmental benefit and many environmental claims go unchallenged. This measure ensures a product marketed with a certain recycled content claim is accurate by holding manufacturers and suppliers accountable for the claim." 2) Current law addresses false or unsubstantiated environmental claims . Under federal law, unfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce, are unlawful. (15 U.S.C. §45). The Federal Trade Commission (FTC) issues "Guides for the Use of Environmental Marketing Claims" (also referred to as the "Green Guides"). These Guides outline general principles that apply to all environmental marketing claims and provide guidance on specific green claims, including provisions relating to "recycled content" (16 CFR 260.7(d)). According to the FTC, "The Commission has brought law enforcement actions targeting allegedly false or unsubstantiated environmental claims. Because the Green Guides are administrative interpretations of the law, they do not have the force and effect of law and they are not independently enforceable. However, if a marketer makes claims that are inconsistent with the Guides, the FTC can take action under Section 5 of the FTC Act, which prohibits unfair or deceptive practices." AB 837 Page 4 Current law authorizes any person who engages, has engaged, or proposes to engage in unfair competition to be enjoined in any court of competent jurisdiction (Business and Professions Code §17203). Also, under Environmental Representations Law, any person is prohibited from making any untruthful, deceptive, or misleading environmental marketing claim. (§17580.5). For purposes of this provision, "environmental marketing claim" must include any claim contained in the "Guides for the Use of Environmental Marketing Claims" published by the FTC. As noted above, the Guides contain provisions relating to recycled content. Also, any person who represents in advertising or on a label that the consumer good it manufactures or distributes is not harmful to, or is beneficial to, the natural environment through the use of certain terms (e.g., "ecologically friendly," "earth friendly," "green product") or any like term, must maintain in written form certain information and documentation supporting the validity of the representation. This information and documentation must be furnished to the public upon request. (§17580). The previous version of AB 837 conflicted with federal and state law that already address untruthful, deceptive, or misleading environmental marketing claims for consumer goods. AB 837 was amended June 7, 2012, to avoid this conflict by requiring any manufacturer or supplier making an environmental claim regarding recycled content of a plastic food container to maintain information supporting the claim that: a) the recycled content has been diverted from the solid waste stream, and b) the claim conforms with the uniform standards for recycled content from FTC's "Guides for the Use of Environmental Marketing Claims." This information must be furnished to any member of the public upon request or provided by a link on an Internet Web site. Also, this provision does not limit requirements under the Plastic Products Law or other provisions of law, and sunsets January 1, 2018, to enable the Legislature to evaluate the bill's effectiveness. SOURCE : Assemblymember Nestande SUPPORT : Californians Against Waste AB 837 Page 5 OPPOSITION : American Chemistry Council, California Chamber of Commerce, California Grocers Association, California League of Food Processors, California Manufacturers and Technology Association, California Retailers Association, Grocery Manufacturers Association, International Bottled Water Association