Guides for the Use of Environmental Marketing Claims

FEDERAL TRADE COMMISSION

16 CFR Part 260

Guides for the Use of Environmental Marketing Claims

AGENCY: Federal Trade Commission.

ACTION: Final rule; Publication of revised guides.

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SUMMARY: The Federal Trade Commission (the ``FTC'' or ``Commission'')

issued its Guides for the Use of Environmental Marketing Claims

(``guides'') on July 28, 1992. 57 FR 36363 (Aug. 13, 1992), codified at

16 CFR Part 260. The guides included a provision for public comment and

review three years after adoption for the purpose of determining

whether there is a need for any modifications. In connection with the

three year review, the Commission sought public comment on a variety of

issues pertaining to the guides, 60 FR 38978 (July 31, 1995) and held a

two day Public Workshop-Conference on December 7 and 8, 1995. The

Commission has completed its review of the prefatory sections of the

guides, as well as the following sections: General Environmental

Benefits, Degradable/Biodegradable/Photodegradable, Recycled Content,

Source Reduction, Refillable, and Ozone Safe and Ozone Friendly. These

sections are being republished with only the minor revisions discussed

below.

The Commission is still in the process of reviewing the Compostable

and Recyclable guides. The original versions of these guides shall

remain in effect until further notice. See 16 CFR 260.7 (c) and (d).

Finally, the Commission is seeking further public comment on the issue

of whether product parts that can be reconditioned and/or reused in the

manufacture of new products should be considered ``recyclable'' under

the guides and whether products manufactured from such reconditioned

and/or reused parts should qualify as ``recycled'' under the guides.

DATES: Effective Date: October 4, 1996.

COMMENTS: Comments and/or data must be submitted on or before

November 25, 1996.

ADDRESSES: Although the Commission has concluded its general review of

the guides, it is seeking additional information on two discrete

issues: (1) Whether product parts that can be reconditioned and/or

reused in the manufacture of new products should qualify as

``recyclable'' under the guides and whether products manufactured from

such reconditioned and/or reused parts should qualify as ``recycled''

under the guides: and (2) any additional empirical evidence available

on consumer perception of ``recyclable'' and ``compostable'' claims.

Six paper copies of comments and/or data should be submitted to:

Secretary, Federal Trade Commission, Room H-159, Sixth and Pennsylvania

Ave., N.W., Washington, D.C. 20580. Comments should be identified as

``16 CFR Part 260--Comment.'' To encourage prompt and efficient review

and dissemination of the comments and data to the public, all comments

and data also should be submitted, if possible, in electronic form, on

either a 5\1/4\ or a 3\1/2\ inch computer disk, with a label on the

disk stating the name of the commenter and the name and version of the

word processing program used to create the document. (Programs based on

DOS are preferred. Files from other operating systems should be

submitted in ASCII text format to be accepted.) Individuals filing

comments or data need not submit multiple copies, and need not submit

such materials in electronic form.

The FTC will make this notice and all comments and data received in

response to this notice available to the public through the Internet,

to the extent technically possible. To access this notice and the

comments and data filed in response to this notice, access the World

Wide Web at the following address: http://www.ftc.gov. At this time,

the FTC cannot receive comments or data made in response to this notice

over the Internet.

FOR FURTHER INFORMATION CONTACT: Kevin M. Bank, (202) 326-2675,

Division of Advertising Practices, Bureau of Consumer Protection,

Federal Trade Commission, 6th and Pennsylvania Avenue, NW., Washington,

DC 20580.

SUPPLEMENTARY INFORMATION:

1. Background

The Guides for the Use of Environmental Marketing Claims or

``guides'' were issued by the Commission on July 28, 1992, and

[[Page 53312]]

published in the Federal Register on August 13, 1992 (57 FR 36363).

Like other industry guides issued by the Commission, the Environmental

Marketing Guides ``are administrative interpretations of laws

administered by the Commission for the guidance of the public in

conducting its affairs in conformity with legal requirements.'' 16 CFR

1.5. They provide the basis for advertisers' voluntary compliance with

the law, as well as simultaneous abandonment of unlawful practices.

Conduct inconsistent with the guides may result in corrective action by

the Commission if this conduct is found to be in violation of

applicable statutory provisions. The Commission promulgates industry

guides ``when it appears to the Commission that guidance as to the

legal requirements applicable to particular practices would be

beneficial in the public interest and would serve to bring about more

widespread and equitable observance of laws administered by the

Commission.'' 16 CFR 1.6.

The Environmental Marketing Guides indicate how the FTC will apply

Section 5 of the Federal Trade Commission Act (``FTC Act''), which

prohibits unfair or deceptive advertising claims, in the area of

environmental marketing claims.1 The guides apply to all forms of

marketing of products to the public, whether through advertisements,

labels, package inserts, or promotional materials.

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1 15 U.S.C. 45.

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The guides reiterate Commission policy regarding how Section 5

applies to advertising claims generally, as enunciated in the

Commission's Policy Statement on Deception,2 and its Policy

Statement on the Advertising Substantiation.3 Four general

principles are outlined that apply to all environmental marketing

claims: Qualifications and disclosures should be sufficiently clear and

prominent to prevent deception; claims should make clear whether they

apply to the product, the package or a component of either; claims

should not overstate an environmental attribute or benefit, expressly

or by implication; and comparative claims should be presented in a

manner that makes the basis for the comparison sufficiently clear to

avoid consumer deception.

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2 Federal Trade Commission Policy Statement on Deception,

appended to Cliffdale Assocs., Inc., 103 F.T.C. 110 (1984).

3 Federal Trade Commission Policy Statement Regarding

Advertising Substantiation, appended to Thompson Medical Co., 104

F.T.C. 648 (1984).

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In addition, the guides address eight specific categories of

environmental claims: general environmental benefits, ``degradable,''

``compostable,'' ``recyclable,'' ``recycled content,'' ``source

reduction,'' ``refillable,'' and ``ozone safe''/``ozone friendly.''

Each guide describes the basic elements necessary to substantiate the

claim, including examples of qualifications that may be used to avoid

deception. In addition, each guide is followed by several examples that

illustrate different uses of the particular term that do and do not

comport with the guides. In many of the examples, one or more options

are presented for qualifying a claim. The guides state that these

options are intended to provide a ``safe harbor'' for marketers who

want certainty about how to make environmental claims, but that they do

not represent the only permissible approach to qualifying a claim.

The guides included a provision that three years after adoption,

the Commission would seek public comment on ``whether and how the

guides need to be modified in light of ensuing developments.'' Pursuant

to this provision, the Commission sought comment on the guides in a

Federal Register Notice published on July 31, 1995 (60 FR 38978)

(hereinafter ``Notice''). The Commission sought comment on a number of

general issues relating to the guides' efficacy and the need, if any,

to revise or update the guides. The Commission also sought comment on a

number of specific issues related to particular environmental claims

addressed by the guides. In addition, the Notice announced that

Commission staff would be conducting a Public Workshop-Conference at

the conclusion of the comment period to discuss issues raised by the

written comments. Forty-four of the ninety-nine commenters participated

in the workshop, which was held on December 8 and 9, 1995.

2. Overview of Comments and Public Workshop-Conference

The ninety-nine comments received in response to the Notice came

from forty-five trade associations or trade association coalitions,

twenty-eight manufacturers, distributors or retailers, twelve

consumers, environmental or public advocacy organizations, one

standards organization, two certification organizations, two federal

government agencies or officials, four State government officials or

bodies, one city government official, one individual, one educational

institution, one consulting company, and one public-private recycling

coalition. Virtually all the commenters supported the guides in

general, although many recommended specific changes. A brief overview

of the comments received in response to questions posed in the Notice

follows. This summary is not intended to be comprehensive. The full

texts of the written comments and the transcript of the Public

Workshop-Conference are available for inspection and copying at the

Federal Trade Commission, 6th and Pennsylvania Avenue, N.W.,

Washington, D.C., Room 130. These materials are also accessible to the

public through the Internet on the World Wide Web at the following

address: http://www.ftc.gov

(a) Continuing Need for the Guides

The commenters who addressed whether there is a continuing need for

the guides all agreed that there is such a need. A handful of

commenters, while supporting the guides, indicated that they would

prefer a trade regulation rule because it would have the force of law

and preempt state laws regulating the use of environmental advertising

claims.

(b) The Costs and Benefits of the Guides to Consumers and Industry

There was a general consensus among commenters that the guides

benefit consumers by stemming the tide of spurious environmental

claims; bolster consumer confidence; increase the flow of specific and

accurate environmental information to consumers, enabling them to make

informed purchasing decisions; and encourage manufacturers to improve

the environmental characteristics of their products and packaging. The

commenters either felt that the guides do not impose any costs on

consumers or that any costs associated with the guides are

insignificant and greatly outweighed by their benefits. Several

commenters raised serious concerns, however, that the Recyclable guide

unnecessarily restricts the flow of information to consumers regarding

the recyclability of products. One commenter voiced similar concerns

about the Compostable guide.

In addition, commenters generally agreed that the guides benefit

industry by providing uniform, consistent guidance regarding the making

of non-deceptive environmental claims; promoting national consistency

in the treatment of environmental marketing claims; assisting

advertisers in determining what claims would likely lead to Commission

challenge; encouraging network review and industry self-regulation; and

allowing flexibility for manufacturers to improve the environmental

attributes of their products and to communicate those improvements to

consumers. For the most part, commenters stated that the

[[Page 53313]]

guides accomplish their goals without undue burden on industry,

although this view was not unanimous. Again, several commenters

complained of what they believe are undue restrictions placed on their

ability to make recyclable claims. They believe that recyclability is

an important product attribute and that they should be able to more

flexibly inform consumers regarding the recyclability of their

products.\4\

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\4\ Because of the serious concerns raised about the Recyclable

guide, the Commission is seeking additional data.

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(c) Effect of Changes in Technology or Economic Conditions

The commenters identified few technological or economic changes

that might impact the guides. A number of comments from industry cited

increases in recycling rates and the number of recycling programs as

justification for making the Recyclable guide less ``restrictive.''

Others stated that recycling rates have not increased sufficiently,

overall, to require modification of the guides. Several environmental

organizations pointed out that while the already high recycling rates

for some items such as newspapers and plastic soda bottles and milk

jugs have further increased, there has been little increase in the

recycling rates of less frequently recycled items like most other types

of plastic packaging. Therefore, they stated that the Recyclable guide

should not be made less ``restrictive.''

(d) Effect of the Guides in Fostering National Uniformity in the

Regulation of Environmental Claims

There was general agreement among the commenters that the guides

have helped promote uniformity in the regulation of environmental

marketing claims. There was also general agreement that any conflict

between the guides and some state laws is becoming less significant as

a result of states such as California, New York, and Rhode Island

either repealing or modifying pre-existing laws concerning

environmental marketing claims to be consistent with the guides.\5\

However, a few manufacturers continued to express concern that a lack

of national uniformity inhibited them from advertising the

environmental attributes of their products. They urged the Commission

to try to encourage more states to adopt the guides. A significant

number of commenters, especially industry representatives, voiced

strong opposition to changing the guides in any way that would

undermine the important state support the guides are now receiving.

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\5\ A potential conflict was identified by commenters who oppose

a change in the Commission's approach to the Society of the Plastics

Industry plastics resin identification code (``SPI code''). They

noted that the SPI code is required by laws in thirty-nine states to

be placed on plastic containers and that if the Commission advises

that the use of the code is deceptive on products and requires that

it be changed there will be a conflict.

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(e) International Developments Affecting the Guides

A number of commenters noted that the International Standards

Organization (ISO) is in the process of drafting standards for

environmental labeling claims made by manufacturers and by third-party

awarders of eco-seals. Some commenters encouraged the Commission to try

to harmonize with ISO to ensure international uniformity. Other

commenters noted that Canada, Japan, and a number of European countries

have adopted official eco-seal programs to award seals to products they

consider environmentally superior. Most commenters who referenced such

programs view the use of some eco-seals, without further qualification,

as potentially vague and exaggerated general environmental benefit

claims. Several of these commenters stated that such seals may impose

trade barriers because, in practice, they favor manufacturers in the

country which awards the seal.

(f) Effect of the Guides in the Marketplace

The Notice sought comment as to the extent to which the guides have

reduced consumer skepticism about environmental claims, the degree of

industry compliance with the guides, and the impact of the guides on

the flow of information to consumers. Commenters who addressed the

issue of consumer skepticism believe that it has lessened but continues

to exist. Many commenters indicated their belief that there is general

industry compliance with the guides. Some commenters, however,

complained that there are still too many unqualified ``recyclable''

claims being made. Others were concerned by the number of broad,

unqualified environmental benefit claims still in the marketplace, like

``environmentally safe'' and ``environmentally friendly.'' There was

general agreement that the number of environmental claims in the

marketplace has not diminished, although certain claims, like

degradable claims for products that are typically disposed of in

landfills, are now rare. Although most commenters believe that the

guides encourage the flow of useful information to consumers, several

industry members complained that the guides reduce the flow of useful

information by restricting their ability to make what they consider to

be truthful ``recyclable'' claims. Furthermore, one trade association

submitted a survey of its members in which 56% of those responding

indicated that they thought that the guides had generally inhibited

their use of environmental marketing claims.

(g) Specific Claims

Over a dozen commenters urged the Commission to make no changes at

all to the guides, while some opposed making specific changes that were

recommended by other commenters. Many commenters asked that a few

specific changes be made. Recyclability issues generated the most

comments, including whether unqualified claims imply local and national

availability of facilities to consumers; the adequacy of various

qualifications suggested in the guides to convey the fact of limited

availability of facilities for recycling many products; the meaning of

``Please Recycle'' on package labels and whether the guides should

address them; how consumers interpret the unqualified three chasing

arrows symbol; and the guides' treatment of the Society of the Plastics

Industry plastic resin identification code (SPI code). The other

primary areas of discussion included whether ``no CFCs'' claims are

deceptive for products that do not contain upper ozone depleters, but

do contain volatile organic compounds (VOCs) which can contribute to

smog, and whether the guides should require disclosures of post-

consumer recycled content for ``recycled'' claims. Several commenters

discussed the issue of whether the guides should address claims based

on ``lifecycle'' analysis and the use of environmental seals and

certifications by marketers. A number of commenters suggested that

additional claims be covered by the guides, including non-toxic claims,

chlorine-free claims, and claims that a product is ``environmentally

preferable.'' No commenter suggested that any of the eight specific

categories of claims covered by the guides be dropped.

(h) Empirical Evidence

The Notice solicited new evidence concerning consumer perception of

environmental claims. Only a small amount of consumer research was

submitted on how consumers perceive specific claims.

[[Page 53314]]

3. Request for Further Comment

The Commission specifically sought comment as to whether consumers

perceive that products made from reconditioned parts that would

otherwise have been thrown away are ``recycled'' products, and what

modifications, if any, should be made to the guides to address these

consumer perceptions. The Commission received no empirical evidence in

response to this request, but did receive several comments discussing

this issue. The Commission has determined to give further consideration

to this question, as well as to the related issue of whether product

parts that can be reconditioned and/or reused in the manufacture of new

products should be considered ``recyclable'' if adequate

infrastructures for collecting the parts are available. The Commission

is seeking consumer perception data on these issues, as well as further

information responsive to the questions outlined below.

The Recycled guide defines ``recycled content'' as material that a

marketer can substantiate has been recovered or otherwise diverted from

the waste stream. This could be interpreted to include products made

from reconditioned and/or reused parts, as well as products made from

recycled raw materials like steel from melted down cans. However, the

Recyclable guide states further that for something to be recyclable it

must be diverted from the solid waste stream for use as ``raw materials

in the manufacture or assembly of a new product or package.''

Therefore, product parts that are capable of being reconditioned and/or

reused in the manufacture of new products are not considered

``recyclable'' under the guides, because the parts are not actually

reprocessed into raw materials before reuse. In addition, products

manufactured from such parts may not be considered ``recycled'' under

the guides.

The Commission is seeking comment and consumer perception data on

whether product parts that can be reconditioned and/or reused in the

manufacture of new products should be considered ``recyclable'' under

the guides (assuming adequate infrastructures for collecting the parts

are available), and on whether products manufactured from reconditioned

and/or reused parts should be considered ``recycled.'' In addition, the

Commission seeks comment on whether consumers perceive that the term

``recycled'' conveys information about the quality of a product, and

whether consumers' concerns about quality differ with respect to

products made from reconditioned or reused parts and those made from

recycled raw materials. The Commission also requests comment on whether

consumer perception of a product being recycled would be affected if

marketers of products made from reconditioned and/or reused parts could

prove that the quality of those products is substantially equivalent to

that of comparable products made from recycled raw materials.

The Commission has received some consumer survey evidence on the

issue of whether consumers consider products made from reconditioned

parts to be ``recycled.'' This evidence is responsive to a question

included in a survey conducted by the Council on Packaging in the

Environment (COPE) in April 1996. The Commission is placing this survey

evidence on the public record and seeks comment on it. The survey,

including this evidence, is available for inspection and copying at the

Federal Trade Commission, 6th and Pennsylvania Avenue, N.W.,

Washington, D.C., Room 130.

The Commission also solicits public comment on the following

questions relating to reconditioned and reused parts:

1. Do consumers generally perceive that parts that can be taken

from products for reconditioning and/or reuse in the manufacture of new

products are ``recyclable''? Why or why not? Please provide any

empirical data.

2. Do consumers generally perceive that products manufactured from

reconditioned and/or reused parts are ``recycled''? Why or why not?

Please provide any empirical data.

3. Do consumers generally perceive that the term ``recycled''

conveys information about the quality of a product? Do consumers'

concerns about product quality differ with respect to whether a product

is made from reconditioned and/or reused parts recovered from the solid

waste stream or from raw materials like steel from melted cans

recovered from the solid waste stream? Please provide any empirical

data.

4. Would consumer perception about whether a product is or is not

``recycled'' be affected if marketers of products made from

reconditioned and/or reused parts could prove that those products are

``substantially equivalent'' in quality to comparable products made

from recycled raw materials? If so, how? Please provide any empirical

data.

5. What evidence should be required to show that products

containing reconditioned and/or reused parts are ``substantially

equivalent'' in quality to comparable products made from recycled raw

materials? Please provide any empirical data.

6. Are consumers likely to be deceived about the quality of

products made from reconditioned and/or reused parts if they are

advertised as ``recycled''? If so, how should the Commission address

this concern?

7. What are the costs and benefits to consumers and to industry if:

(a) Parts that can be taken from products for reconditioning and/or

reuse in the manufacture of new products are marketed as

``recyclable''? or

(b) Products manufactured from reconditioned and/or reused parts

are marketed as ``recycled'' products? Please provide any empirical

data.

4. Modifications to the Guides

After careful review of the comments and the discussion at the

Public Workshop-Conference, the Commission has determined to make

modifications to the General Environmental Benefit Claims guide, the

Degradable/Biodegradable/Photodegradable guide, the Recycled Content

guide and the Ozone Safe/Ozone Friendly guide. Some modifications have

also been made in the prefatory sections. The changes have been made to

ensure that the guides continue to reflect current technology and

changing consumer perception, as well as to address newer environmental

claims in the marketplace that the Commission believes have been, or

could be, used in a deceptive manner.6 In deciding whether to

modify the guides, the Commission analyzed what the covered claims

convey to consumers, and the extent to which available empirical

evidence indicates that consumer perception of particular claims has

changed. Some changes were also made for purposes of clarification.

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\6\ No changes have been made to the Source Reduction guide or

the Refillable guide.

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The Commission is still in the process of reviewing the Recyclable

and Compostable guides and will not reissue them until it evaluates the

results of ongoing consumer research. One purpose of this research is

to examine whether these claims continue to imply that consumers can

recycle or compost the advertised product in their own area. The

research will be placed on the public record when it is completed. The

current Recyclable and Compostable guides, codified at 16 C.F.R. 260.7

(c)-(d) (1996), remain in effect until the Commission completes its

evaluation. While the review of these two guides continues, the

Commission seeks the submission of any further empirical data on

consumers' understanding and

[[Page 53315]]

perceptions of ``recyclable'' and ``compostable'' claims. Additional

data may be filed with the Secretary of the Commission in the manner

noted above.

Changes to the guides are as follows:

(a) Modifications to the Prefatory Sections.

(i) Review Procedure.

The Commission has updated the section on the review procedure for

the guides. This section now states that the Environmental Marketing

Guides will be reviewed in the future as part of the Commission's

general program of reviewing all industry guides on an ongoing basis.

The provision permitting parties to petition the Commission to amend

the guides in light of substantial new evidence has not been changed.

(ii) Interpretation and Substantiation of Environmental Marketing

Claims.

The definition of ``competent and reliable scientific evidence''

has been clarified and is now consistent with the language used in

recent Commission consent orders. Such evidence is now defined as

``tests, analyses, research, studies or other evidence based on the

expertise of professionals in the relevant area, that has been

conducted and evaluated in an objective manner by persons qualified to

do so, using procedures generally accepted in the profession to yield

accurate and reliable results.''

(iii) General Principles.

The Commission has added a new example to this section under the

subsection Overstatement of An Environmental Benefit. This example is

based on the consent agreement in the Mr. Coffee, Inc. case,7

where the Commission challenged a ``chlorine-free process'' claim for

paper coffee filters that, while not bleached with elemental chlorine,

had been bleached in a new process with a chlorine compound. The

Commission alleged that the new bleaching process contained some

elemental chlorine which continued to release a significant amount of

the environmentally harmful dioxins and furans associated with

elemental chlorine bleaching, though in lesser amounts. The example

explains that a ``chlorine-free process'' claim is likely to overstate

the environmental benefit provided by a product if the manufacturing

process continues to release into the environment a significant, even

if reduced, amount of the same harmful byproducts associated with

chlorine bleaching. The example illustrates one possible way to make

substantiated claims of this nature, i.e., that the filters are

bleached with a process that ``substantially reduces, but does not

eliminate, harmful substances associated with chlorine bleaching.''

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\7\ Mr. Coffee, Inc., Docket C-3486 (March 25, 1994).

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(iv) Preamble to Environmental Marketing Claims Section.

The footnote on lifecycle claims stated that the guides do not

address claims based on a ``lifecycle'' theory of environmental benefit

because such analyses are still in their infancy, and the Commission

lacks sufficient information on which to base guidance. The Commission

continues to lack sufficient information to provide guidance on these

claims; however, it is no longer accurate to continue to characterize

``lifecycle'' analyses as being in their ``infancy.'' The footnote has

been modified to state that the guides do not currently address these

types of claims, because the Commission lacks sufficient information on

which to base guidance.

(b) General Environmental Benefit Claims Guide.

Three new examples have been added to this guide. One illustrates

that in some contexts, a ``non-toxic'' claim may convey to consumers

that a product does not pose any risk to human health or the

environment, and that the claim would be deceptive if the product does,

in fact, pose a significant risk to either human health or the

environment. This example is based on the Orkin Exterminating Company,

Inc. and Safe Brands Corp., et al. cases.8 In Orkin, the

Commission alleged that the company had made unsubstantiated

``practically non-toxic'' claims for lawn care pesticide products which

implied that the products did not pose any significant risk to human

health or the environment. In Safe Brands, the Commission charged that

advertisements for a propylene glycol-based antifreeze product, which

included claims that the product was ``essentially non-toxic'' and

``the ultimate in * * * environmental safety,'' implied that the

product was absolutely safe for people, pets and the environment. The

example states that phrases like ``essentially non-toxic'' and

``practically non-toxic'' can convey absolute claims of safety both to

health and to the environment when used to advertise products such as

lawn care pesticides and antifreeze. The example states that such

claims are deceptive if the product does, in fact, pose a significant

risk to human health or the environment.

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\8\ Orkin Exterminating Company, Inc., Docket C-3495 (May 25,

1994); Safe Brands Corp., et al., Docket C-3647 (March 26, 1996).

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The other new examples address ``seal of approval'' and

``environmentally preferable'' claims. Several commenters noted that

when environmental seals of approval are found on product labels, they

have been placed there to indicate that the products are

environmentally superior to others. Based on these comments, the

Commission believes that consumers would interpret environmental seals

of approval that are not accompanied by qualifying text to mean that

the product is environmentally superior to other products. The

Commission also believes that unqualified ``environmentally

preferable'' claims are likely to convey broad messages of

environmental superiority to consumers.

The example on ``seal of approval'' claims states that the use of

an environmental seal with no textual qualification, or inadequate

qualification, is likely to convey to consumers that the product is

environmentally superior to other products. Therefore, if the

manufacturer cannot substantiate this broad claim of environmental

superiority, the claim is likely to be deceptive. The claim would not

be deceptive, however, if the manufacturer qualified it with clear and

prominent language limiting the superiority representation to the

particular product attribute or attributes for which the claim of

environmental superiority could be substantiated, provided that no

other deceptive implications were created by the context. The new

example addressing ``environmentally preferable'' claims states

similarly that the term is likely to convey a broad claim of

environmental superiority to consumers, which must be substantiated or

adequately qualified.

(c) Degradable/Biodegradable/Photodegradable Guide.

A new example has been added to address concerns raised about a

possible conflict between the degradable guide and the requirements of

federal and state laws concerning performance standards for

photodegradability of certain products. The example states that

symbols, such as a diamond logo, that are required by some state laws

to appear on certain photodegradable plastics to indicate that they

meet performance standards to ensure they will photodegrade if

littered, do not constitute claims of degradability. A footnote has

also been added to clarify that the guides' treatment of degradable

claims is intended to help prevent consumer deception and is not

intended to establish performance standards for laws intended to ensure

that products degrade when littered so as to a avoid a potential hazard

to wildlife.

(d) Recycled Content Guide.

[[Page 53316]]

Several examples have been amended for purposes of clarification

and one new example has been added to this Guide. The new example

addresses the use of the ``three chasing arrows'' symbol without any

textual qualification. Consumer perception data 9 indicates that

the use of the three chasing arrows symbol by itself conveys to

consumers that a product is made entirely from recycled material and

that it is recyclable. The new example provides that if a marketer of a

product bearing the three chasing arrows symbol without qualification

cannot substantiate both of these claims, it should qualify the claim

to indicate whether the symbol refers to the recyclability and/or

recycled content of the product. The example states that further

qualification of these claims may be necessary. For instance, a

recycled content claim should also disclose the percentage of recycled

content, if that amount is less than 100%.

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\9\ See ``Public Understanding of the Chasing Arrows Symbol and

Recycled Content Claims,'' conducted for the Paper Recycling

Coalition and placed on the public record on July 28, 1995.

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Modifications have been made to several examples in the Recycled

Content guide for purposes of consistency and clarification. Example 1

has been modified to eliminate the reference to scraps from ``trimming

finished products'' in the description of materials that do not qualify

as pre-consumer recycled material, i.e., those manufacturing byproducts

that are normally reused by industry in the original manufacturing

process after only minimal reprocessing. The phrase scraps from

``trimming finished products'' could be misinterpreted to mean that

scraps or trimmings from finished paper products, which require

significant reprocessing before they can be used again in the

manufacture of other paper products, do not qualify as pre-consumer

recycled material. The new example, therefore, deletes the reference to

scraps from ``trimming finished products.''

In addition, modifications have been made to Examples 3, 4 and 9 to

make them consistent with Example 7. Example 7 permits recycled content

claims for paper to be made on a fiber weight basis (i.e., stated as

``contains X% recycled fiber''), whereas Examples 3, 4 and 9 contain

language in which the recycled content of a paper product is expressed

as a percentage of the total weight of the paper. EPA regulations

regarding federal government procurement of recycled content paper

products use the ``fiber weight'' standard,10 as do a number of

state procurement laws. To promote consistency and eliminate any

possible ambiguity, the hypothetical claims in Examples 3, 4 and 9 are

now expressed in terms of a fiber weight, rather than total weight

basis.

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\10\ See 61 FR 26986 (May 29, 1996).

---------------------------------------------------------------------------

(e) Ozone Safe and Ozone Friendly Guide.

The Ozone Safe/Ozone Friendly guide has been modified to state, not

only that it is deceptive to misrepresent that a product is safe or

``friendly'' to the ozone layer, but also that it is deceptive to

misrepresent that a product is safe or ``friendly'' to the atmosphere.

In addition, an example has been added to the guide to illustrate that

a claim such as ``ozone friendly'' conveys to consumers that a product

is harmless not only to the upper ozone layer but to the atmosphere as

a whole. Such claims are, therefore, deceptive for products that

contain volatile organic compounds (VOCs), ingredients that can

contribute to ground level ozone, a component of smog. This additional

example is based on consumer perception data obtained by the Commission

since the guides were issued.11 These data indicate that consumers

interpret an ``Ozone Friendly'' claim to mean that a product does not

contribute to smog or air pollution generally, and is safe for the

atmosphere as whole.

---------------------------------------------------------------------------

\11\ See Maronick and Andrews, ``Consumers' Interpretations of

Environmental Claims,'' March 10, 1993, placed on the public record

with the Request for Comment on July 28, 1995.

---------------------------------------------------------------------------

A change has also been made to Example 1 of the Ozone Safe/Ozone

Friendly guide. This example lists certain chemicals that are

classified as ``Class I'' ozone depleters in Title VI of the Clean Air

Act Amendments of 1990.12 The Amendments grant EPA the authority

to designate other chemicals as ozone depleters. Since the guides were

issued in 1992, EPA has designated two additional chemicals, methyl

bromide and hydrobromofluorocarbons (HBFCs) as Class I ozone depleters.

These two chemicals have now been added to the list of Class I ozone

depleters in Example 1.

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\12\ 42 U.S.C. 7671 et seq.

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5. Text of Modified Guides

List of Subjects in 16 CFR Part 260

Advertising, Environmental protection, Labeling, Trade practices.

For the reasons set forth in the preamble, 16 CFR Part 260 is

amended by revising sections 260.1 through 260.6, 260.7 (a) and (b),

260.7 (e) through (h), and 260.8 to read as follows:

PART 260--GUIDES FOR THE USE OF ENVIRONMENTAL MARKETING CLAIMS

Sec.

260.1 Statement of purpose.

260.2 Scope of guides.

260.3 Structure of the guides.

260.4 Review procedure.

260.5 Interpretation and substantiation of environmental marketing

claims.

260.6 General principles.

260.7 Environmental marketing claims.

260.8 Environmental assessment.

Authority: 15 U.S.C. 41-58.

Sec. 260.1 Statement of purpose.

The guides in this part represent administrative interpretations of

laws administered by the Federal Trade Commission for the guidance of

the public in conducting its affairs in conformity with legal

requirements. These guides specifically address the application of

Section 5 of the FTC Act to environmental advertising and marketing

practices. They provide the basis for voluntary compliance with such

laws by members of industry. Conduct inconsistent with the positions

articulated in these guides may result in corrective action by the

Commission under Section 5 if, after investigation, the Commission has

reason to believe that the behavior falls within the scope of conduct

declared unlawful by the statute.

Sec. 260.2 Scope of guides.

These guides apply to environmental claims included in labeling,

advertising, promotional materials and all other forms of marketing,

whether asserted directly or by implication, through words, symbols,

emblems, logos, depictions, product brand names, or through any other

means. The guides apply to any claim about the environmental attributes

of a product or package in connection with the sale, offering for sale,

or marketing of such product or package for personal, family or

household use, or for commercial, institutional or industrial use.

Because the guides are not legislative rules under Section 18 of

the FTC Act, they are not themselves enforceable regulations, nor do

they have the force and effect of law. The guides themselves do not

preempt regulation of other federal agencies or of state and local

bodies governing the use of environmental marketing claims. Compliance

with federal, state or local law and regulations concerning such

claims, however, will not necessarily

[[Page 53317]]

preclude Commission law enforcement action under Section 5.

Sec. 260.3 Structure of the guides.

The guides are composed of general principles and specific guidance

on the use of environmental claims. These general principles and

specific guidance are followed by examples that generally address a

single deception concern. A given claim may raise issues that are

addressed under more than one example and in more than one section of

the guides. In many of the examples, one or more options are presented

for qualifying a claim. These options are intended to provide a ``safe

harbor'' for marketers who want certainty about how to make

environmental claims. They do not represent the only permissible

approaches to qualifying a claim. The examples do not illustrate all

possible acceptable claims or disclosures that would be permissible

under Section 5. In addition, some of the illustrative disclosures may

be appropriate for use on labels but not in print or broadcast

advertisements and vice versa. In some instances, the guides indicate

within the example in what context or contexts a particular type of

disclosure should be considered.

Sec. 260.4 Review procedure.

The Commission will review the guides as part of its general

program of reviewing all industry guides on an ongoing basis. Parties

may petition the Commission to alter or amend these guides in light of

substantial new evidence regarding consumer interpretation of a claim

or regarding substantiation of a claim. Following review of such a

petition, the Commission will take such action as it deems appropriate.

Sec. 260.5 Interpretation and substantiation of environmental

marketing claims.

Section 5 of the FTC Act makes unlawful deceptive acts and

practices in or affecting commerce. The Commission's criteria for

determining whether an express or implied claim has been made are

enunciated in the Commission's Policy Statement on Deception.13 In

addition, any party making an express or implied claim that presents an

objective assertion about the environmental attribute of a product or

package must, at the time the claim is made, possess and rely upon a

reasonable basis substantiating the claim. A reasonable basis consists

of competent and reliable evidence. In the context of environmental

marketing claims, such substantiation will often require competent and

reliable scientific evidence, defined as tests, analyses, research,

studies or other evidence based on the expertise of professionals in

the relevant area, conducted and evaluated in an objective manner by

persons qualified to do so, using procedures generally accepted in the

profession to yield accurate and reliable results. Further guidance on

the reasonable basis standard is set forth in the Commission's 1983

Policy Statement on the Advertising Substantiation Doctrine. 49 FR

30999 (August 2, 1984); appended to Thompson Medical Co., 104 F.T.C.

648 (1984). The Commission has also taken action in a number of cases

involving alleged deceptive or unsubstantiated environmental

advertising claims. A current list of environmental marketing cases

and/or copies of individual cases can be obtained by calling the FTC

Public Reference Branch at (202) 326-2222.

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\13\ Cliffdale Associates, Inc., 103 F.T.C. 110, at 176, 176

n.7, n.8, Appendix, reprinting letter dated Oct. 14, 1983, from the

Commission to The Honorable John D. Dingell, Chairman, Committee on

Energy and Commerce, U.S. House of Representatives (1984)

(``Deception Statement'').

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Sec. 260.6 General principles.

The following general principles apply to all environmental

marketing claims, including, but not limited to, those described in

Sec. 260.7. In addition, Sec. 260.7 contains specific guidance

applicable to certain environmental marketing claims. Claims should

comport with all relevant provisions of these guides, not simply the

provision that seems most directly applicable.

(a) Qualifications and disclosures: The Commission traditionally

has held that in order to be effective, any qualifications or

disclosures such as those described in the guides in this part should

be sufficiently clear and prominent to prevent deception. Clarity of

language, relative type size and proximity to the claim being

qualified, and an absence of contrary claims that could undercut

effectiveness, will maximize the likelihood that the qualifications and

disclosures are appropriately clear and prominent.

(b) Distinction between benefits of product and package: An

environmental marketing claim should be presented in a way that makes

clear whether the environmental attribute or benefit being asserted

refers to the product, the product's packaging or to a portion or

component of the product or packaging. In general, if the environmental

attribute or benefit applies to all but minor, incidental components of

a product or package, the claim need not be qualified to identify that

fact. There may be exceptions to this general principle. For example,

if an unqualified ``recyclable'' claim is made and the presence of the

incidental component significantly limits the ability to recycle the

product, then the claim would be deceptive.

Example 1: A box of aluminum foil is labeled with the claim

``recyclable,'' without further elaboration. Unless the type of

product, surrounding language, or other context of the phrase

establishes whether the claim refers to the foil or the box, the

claim is deceptive if any part of either the box or the foil, other

than minor, incidental components, cannot be recycled.

Example 2: A soft drink bottle is labeled ``recycled.'' The

bottle is made entirely from recycled materials, but the bottle cap

is not. Because reasonable consumers are likely to consider the

bottle cap to be a minor, incidental component of the package, the

claim is not deceptive. Similarly, it would not be deceptive to

label a shopping bag ``recycled'' where the bag is made entirely of

recycled material but the easily detachable handle, an incidental

component, is not.

(c) Overstatement of environmental attribute: An environmental

marketing claim should not be presented in a manner that overstates the

environmental attribute or benefit, expressly or by implication.

Marketers should avoid implications of significant environmental

benefits if the benefit is in fact negligible.

Example 1: A package is labeled, ``50% more recycled content

than before.'' The manufacturer increased the recycled content of

its package from 2 percent recycled material to 3 percent recycled

material. Although the claim is technically true, it is likely to

convey the false impression that the advertiser has increased

significantly the use of recycled material.

Example 2: A trash bag is labeled ``recyclable'' without

qualification. Because trash bags will ordinarily not be separated

out from other trash at the landfill or incinerator for recycling,

they are highly unlikely to be used again for any purpose. Even if

the bag is technically capable of being recycled, the claim is

deceptive since it asserts an environmental benefit where no

significant or meaningful benefit exists.

Example 3: A paper grocery sack is labeled ``reusable.'' The

sack can be brought back to the store and reused for carrying

groceries but will fall apart after two or three reuses, on average.

Because reasonable consumers are unlikely to assume that a paper

grocery sack is durable, the unqualified claim does not overstate

the environmental benefit conveyed to consumers. The claim is not

deceptive and does not need to be qualified to indicate the limited

reuse of the sack.

Example 4: A package of paper coffee filters is labeled ``These

filters were made with a chlorine-free bleaching process.'' The

filters are bleached with a process that releases into the

environment a reduced, but still significant, amount of the same

harmful byproducts associated with chlorine bleaching. The claim is

likely to overstate the product's benefits because it is likely to

be

[[Page 53318]]

interpreted by consumers to mean that the product's manufacture does

not cause any of the environmental risks posed by chlorine

bleaching. A claim, however, that the filters were ``bleached with a

process that substantially reduces, but does not eliminate, harmful

substances associated with chlorine bleaching'' would not, if

substantiated, overstate the product's benefits and is unlikely to

be deceptive.

(d) Comparative claims: Environmental marketing claims that include

a comparative statement should be presented in a manner that makes the

basis for the comparison sufficiently clear to avoid consumer

deception. In addition, the advertiser should be able to substantiate

the comparison.

Example 1: An advertiser notes that its shampoo bottle contains

``20% more recycled content.'' The claim in its context is

ambiguous. Depending on contextual factors, it could be a comparison

either to the advertiser's immediately preceding product or to a

competitor's product. The advertiser should clarify the claim to

make the basis for comparison clear, for example, by saying ``20%

more recycled content than our previous package.'' Otherwise, the

advertiser should be prepared to substantiate whatever comparison is

conveyed to reasonable consumers.

Example 2: An advertiser claims that ``our plastic diaper liner

has the most recycled content.'' The advertised diaper does have

more recycled content, calculated as a percentage of weight, than

any other on the market, although it is still well under 100%

recycled. Provided the recycled content and the comparative

difference between the product and those of competitors are

significant and provided the specific comparison can be

substantiated, the claim is not deceptive.

Example 3: An ad claims that the advertiser's packaging creates

``less waste than the leading national brand.'' The advertiser's

source reduction was implemented sometime ago and is supported by a

calculation comparing the relative solid waste contributions of the

two packages. The advertiser should be able to substantiate that the

comparison remains accurate.

Sec. 260.7 Environmental marketing claims.

Guidance about the use of environmental marketing claims is set

forth in this section. Each guide is followed by several examples that

illustrate, but do not provide an exhaustive list of, claims that do

and do not comport with the guides. In each case, the general

principles set forth in Sec. 260.6 should also be followed.14

---------------------------------------------------------------------------

\14\ These guides do not currently address claims based on a

``lifecycle'' theory of environmental benefit. The Commission lacks

sufficient information on which to base guidance on such claims.

---------------------------------------------------------------------------

(a) General environmental benefit claims: It is deceptive to

misrepresent, directly or by implication, that a product or package

offers a general environmental benefit. Unqualified general claims of

environmental benefit are difficult to interpret, and depending on

their context, may convey a wide range of meanings to consumers. In

many cases, such claims may convey that the product or package has

specific and far-reaching environmental benefits. As explained in the

Commission's Ad Substantiation Statement, every express and material,

implied claim that the general assertion conveys to reasonable

consumers about an objective quality, feature or attribute of a product

must be substantiated. Unless this substantiation duty can be met,

broad environmental claims should either be avoided or qualified, as

necessary, to prevent deception about the specific nature of the

environmental benefit being asserted.

Example 1: A brand name like ``Eco-Safe'' would be deceptive if,

in the context of the product so named, it leads consumers to

believe that the product has environmental benefits which cannot be

substantiated by the manufacturer. The claim would not be deceptive

if ``Eco-Safe'' were followed by clear and prominent qualifying

language limiting the safety representation to a particular product

attribute for which it could be substantiated, and provided that no

other deceptive implications were created by the context.

Example 2: A product wrapper is printed with the claim

``Environmentally Friendly.'' Textual comments on the wrapper

explain that the wrapper is ``Environmentally Friendly because it

was not chlorine bleached, a process that has been shown to create

harmful substances.'' The wrapper was, in fact, not bleached with

chlorine. However, the production of the wrapper now creates and

releases to the environment significant quantities of other harmful

substances. Since consumers are likely to interpret the

``Environmentally Friendly'' claim, in combination with the textual

explanation, to mean that no significant harmful substances are

currently released to the environment, the ``Environmentally

Friendly'' claim would be deceptive.

Example 3: A pump spray product is labeled ``environmentally

safe.'' Most of the product's active ingredients consist of volatile

organic compounds (VOCs) that may cause smog by contributing to

ground-level ozone formation. The claim is deceptive because, absent

further qualification, it is likely to convey to consumers that use

of the product will not result in air pollution or other harm to the

environment.

Example 4: A lawn care pesticide is advertised as ``essentially

non-toxic'' and ``practically non-toxic.'' Consumers would likely

interpret these claims in the context of such a product as applying

not only to human health effects but also to the product's

environmental effects. Since the claims would likely convey to

consumers that the product does not pose any risk to humans or the

environment, if the pesticide in fact poses a significant risk to

humans or environment, the claims would be deceptive.

Example 5: A product label contains an environmental seal,

either in the form of a globe icon, or a globe icon with only the

text ``Earth Smart'' around it. Either label is likely to convey to

consumers that the product is environmentally superior to other

products. If the manufacturer cannot substantiate this broad claim,

the claim would be deceptive. The claims would not be deceptive if

they were accompanied by clear and prominent qualifying language

limiting the environmental superiority representation to the

particular product attribute or attributes for which they could be

substantiated, provided that no other deceptive implications were

created by the context.

Example 6: A product is advertised as ``environmentally

preferable.'' This claim is likely to convey to consumers that this

product is environmentally superior to other products. If the

manufacturer cannot substantiate this broad claim, the claim would

be deceptive. The claim would not be deceptive if it were

accompanied by clear and prominent qualifying language limiting the

environmental superiority representation to the particular product

attribute or attributes for which it could be substantiated,

provided that no other deceptive implications were created by the

context.

(b) Degradable/biodegradable/photodegradable: It is deceptive to

misrepresent, directly or by implication, that a product or package is

degradable, biodegradable or photodegradable. An unqualified claim that

a product or package is degradable, biodegradable or photodegradable

should be substantiated by competent and reliable scientific evidence

that the entire product or package will completely break down and

return to nature, i.e., decompose into elements found in nature within

a reasonably short period of time after customary disposal. Claims of

degradability, biodegradability or photodegradability should be

qualified to the extent necessary to avoid consumer deception about:

(1) The product or package's ability to degrade in the environment

where it is customarily disposed; and

(2) The rate and extent of degradation.

Example 1: A trash bag is marketed as ``degradable,'' with no

qualification or other disclosure. The marketer relies on soil

burial tests to show that the product will decompose in the presence

of water and oxygen. The trash bags are customarily disposed of in

incineration facilities or at sanitary landfills that are managed in

a way that inhibits degradation by minimizing moisture and oxygen.

Degradation will be irrelevant for those trash bags that are

incinerated and, for those disposed of in landfills, the marketer

does not possess adequate substantiation that the bags will degrade

in a reasonably short period of time in a landfill. The claim is

therefore deceptive.

Example 2: A commercial agricultural plastic mulch film is

advertised as

[[Page 53319]]

``Photodegradable'' and qualified with the phrase, ``Will break down

into small pieces if left uncovered in sunlight.'' The claim is

supported by competent and reliable scientific evidence that the

product will break down in a reasonably short period of time after

being exposed to sunlight and into sufficiently small pieces to

become part of the soil. The qualified claim is not deceptive.

Because the claim is qualified to indicate the limited extent of

breakdown, the advertiser need not meet the elements for an

unqualified photodegradable claim, i.e., that the product will not

only break down, but also will decompose into elements found in

nature.

Example 3: A soap or shampoo product is advertised as

``biodegradable,'' with no qualification or other disclosure. The

manufacturer has competent and reliable scientific evidence

demonstrating that the product, which is customarily disposed of in

sewage systems, will break down and decompose into elements found in

nature in a short period of time. The claim is not deceptive.

Example 4: A plastic six-pack ring carrier is marked with a

small diamond. Many state laws require that plastic six-pack ring

carriers degrade if littered, and several state laws also require

that the carriers be marked with a small diamond symbol to indicate

that they meet performance standards for degradability. The use of

the diamond, by itself, does not constitute a claim of

degradability.15

\15\ The guides' treatment of unqualified degradable claims is

intended to help prevent consumer deception and is not intended to

establish performance standards for laws intended to ensure the

degradability of products when littered.

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(c) * * *

(d) * * *

(e) Recycled content: A recycled content claim may be made only for

materials that have been recovered or otherwise diverted from the solid

waste stream, either during the manufacturing process (pre-consumer),

or after consumer use (post-consumer). To the extent the source of

recycled content includes pre-consumer material, the manufacturer or

advertiser must have substantiation for concluding that the pre-

consumer material would otherwise have entered the solid waste stream.

In asserting a recycled content claim, distinctions may be made between

pre-consumer and post-consumer materials. Where such distinctions are

asserted, any express or implied claim about the specific pre-consumer

or post-consumer content of a product or package must be substantiated.

It is deceptive to misrepresent, directly or by implication, that a

product or package is made of recycled material. Unqualified claims of

recycled content may be made only if the entire product or package,

excluding minor, incidental components, is made from recycled material.

For products or packages that are only partially made of recycled

material, a recycled claim should be adequately qualified to avoid

consumer deception about the amount, by weight, of recycled content in

the finished product or package.

Example 1: A manufacturer routinely collects spilled raw

material and scraps left over from the original manufacturing

process. After a minimal amount of reprocessing, the manufacturer

combines the spills and scraps with virgin material for use in

further production of the same product. A claim that the product

contains recycled material is deceptive since the spills and scraps

to which the claim refers are normally reused by industry within the

original manufacturing process, and would not normally have entered

the waste stream.

Example 2: A manufacturer purchases material from a firm that

collects discarded material from other manufacturers and resells it.

All of the material was diverted from the solid waste stream and is

not normally reused by industry within the original manufacturing

process. The manufacturer includes the weight of this material in

its calculations of the recycled content of its products. A claim of

recycled content based on this calculation is not deceptive because,

absent the purchase and reuse of this material, it would have

entered the waste stream.

Example 3: A greeting card is composed 30% by fiber weight of

paper collected from consumers after use of a paper product, and 20%

by fiber weight of paper that was generated after completion of the

paper-making process, diverted from the solid waste stream, and

otherwise would not normally have been reused in the original

manufacturing process. The marketer of the card may claim either

that the product ``contains 50% recycled fiber,'' or may identify

the specific pre-consumer and/or post-consumer content by stating,

for example, that the product ``contains 50% total recycled fiber,

including 30% post-consumer.''

Example 4: A paperboard package with 20% recycled fiber by

weight is labeled as containing ``20% recycled fiber.'' Some of the

recycled content was composed of material collected from consumers

after use of the original product. The rest was composed of overrun

newspaper stock never sold to customers. The claim is not deceptive.

Example 5: A product in a multi-component package, such as a

paperboard box in a shrink-wrapped plastic cover, indicates that it

has recycled packaging. The paperboard box is made entirely of

recycled material, but the plastic cover is not. The claim is

deceptive since, without qualification, it suggests that both

components are recycled. A claim limited to the paperboard box would

not be deceptive.

Example 6: A package is made from layers of foil, plastic, and

paper laminated together, although the layers are indistinguishable

to consumers. The label claims that ``one of the three layers of

this package is made of recycled plastic.'' The plastic layer is

made entirely of recycled plastic. The claim is not deceptive

provided the recycled plastic layer constitutes a significant

component of the entire package.

Example 7: A paper product is labeled as containing ``100%

recycled fiber.'' The claim is not deceptive if the advertiser can

substantiate the conclusion that 100% by weight of the fiber in the

finished product is recycled.

Example 8: A frozen dinner is marketed in a package composed of

a cardboard box over a plastic tray. The package bears the legend,

``package made from 30% recycled material.'' Each packaging

component amounts to one-half the weight of the total package. The

box is 20% recycled content by weight, while the plastic tray is 40%

recycled content by weight. The claim is not deceptive, since the

average amount of recycled material is 30%.

Example 9: A paper greeting card is labeled as containing 50%

recycled fiber. The seller purchases paper stock from several

sources and the amount of recycled fiber in the stock provided by

each source varies. Because the 50% figure is based on the annual

weighted average of recycled material purchased from the sources

after accounting for fiber loss during the production process, the

claim is permissible.

Example 10: A packaged food product is labeled with a three

chasing arrows symbol without any further explanatory text as to its

meaning. By itself, the symbol is likely to convey that the

packaging is both ``recyclable'' and is made entirely from recycled

material. Unless both messages can be substantiated, the claim

should be qualified as to whether it refers to the package's

recyclability and/or its recycled content. If a ``recyclable claim''

is being made, the label may need to disclose the limited

availability of recycling programs for the package. If a recycled

content claim is being made and the packaging is not made entirely

from recycled material, the label should disclose the percentage of

recycled content.

(f) Source reduction: It is deceptive to misrepresent, directly or

by implication, that a product or package has been reduced or is lower

in weight, volume or toxicity. Source reduction claims should be

qualified to the extent necessary to avoid consumer deception about the

amount of the source reduction and about the basis for any comparison

asserted.

Example 1: An ad claims that solid waste created by disposal of

the advertiser's packaging is ``now 10% less than our previous

package.'' The claim is not deceptive if the advertiser has

substantiation that shows that disposal of the current package

contributes 10% less waste by weight or volume to the solid waste

stream when compared with the immediately preceding version of the

package.

Example 2: An advertiser notes that disposal of its product

generates ``10% less waste.'' The claim is ambiguous. Depending on

contextual factors, it could be a comparison either to the

immediately preceding product or to a competitor's product. The

``10% less waste'' reference is deceptive unless the seller

clarifies which comparison is intended and substantiates that

comparison, or substantiates both possible interpretations of the

claim.

[[Page 53320]]

(g) Refillable: It is deceptive to misrepresent, directly or by

implication, that a package is refillable. An unqualified refillable

claim should not be asserted unless a system is provided for the

collection and return of the package for refill or the later refill of

the package by consumers with product subsequently sold in another

package. A package should not be marketed with an unqualified

refillable claim, if it is up to the consumer to find new ways to

refill the package.

Example 1: A container is labeled ``refillable x times.'' The

manufacturer has the capability to refill returned containers and

can show that the container will withstand being refilled at least x

times. The manufacturer, however, has established no collection

program. The unqualified claim is deceptive because there is no

means for collection and return of the container to the manufacturer

for refill.

Example 2: A bottle of fabric softener states that it is in a

``handy refillable container.'' The manufacturer also sells a large-

sized container that indicates that the consumer is expected to use

it to refill the smaller container. The manufacturer sells the

large-sized container in the same market areas where it sells the

small container. The claim is not deceptive because there is a means

for consumers to refill the smaller container from larger containers

of the same product.

(h) Ozone safe and ozone friendly: It is deceptive to misrepresent,

directly or by implication, that a product is safe for or ``friendly''

to the ozone layer or the atmosphere. For example, a claim that a

product does not harm the ozone layer is deceptive if the product

contains an ozone-depleting substance.

Example 1: A product is labeled ``ozone friendly.'' The claim is

deceptive if the product contains any ozone-depleting substance,

including those substances listed as Class I or Class II chemicals

in Title VI of the Clean Air Act Amendments of 1990, Public Law 101-

549, and others subsequently designated by EPA as ozone-depleting

substances. Chemicals that have been listed or designated as Class I

are chlorofluorocarbons (CFCs), halons, carbon tetrachloride, 1,1,1-

trichloroethane, methyl bromide and hydrobromofluorocarbons (HBFCs).

Chemicals that have been listed as Class II are

hydrochlorofluorocarbons (HCFCs).

Example 2: An aerosol air freshener is labeled ``ozone

friendly.'' Some of the product's ingredients are volatile organic

compounds (VOCs) that may cause smog by contributing to ground-level

ozone formation. The claim is likely to convey to consumers that the

product is safe for the atmosphere as a whole, and is therefore,

deceptive.

Example 3: The seller of an aerosol product makes an unqualified

claim that its product ``Contains no CFCs.'' Although the product

does not contain CFCs, it does contain HCFC-22, another ozone

depleting ingredient. Because the claim ``Contains no CFCs'' may

imply to reasonable consumers that the product does not harm the

ozone layer, the claim is deceptive.

Example 4: A product is labeled ``This product is 95% less

damaging to the ozone layer than past formulations that contained

CFCs.'' The manufacturer has substituted HCFCs for CFC-12, and can

substantiate that this substitution will result in 95% less ozone

depletion. The qualified comparative claim is not likely to be

deceptive.

Sec. 260.8 Environmental assessment.

National Environmental Policy Act. In accordance with Sec. 1.83 of

the FTC's Procedures and Rules of Practice \4\ and Sec. 1501.3 of the

Council on Environmental Quality's regulations for implementing the

procedural provisions of National Environmental Policy Act, 42 U.S.C.

4321 et seq. (1969),\5\ the Commission prepared an environmental

assessment when the guides were issued in July 1992 for purposes of

providing sufficient evidence and analysis to determine whether issuing

the Guides for the Use of Environmental Marketing Claims required

preparation of an environmental impact statement or a finding of no

significant impact. After careful study, the Commission concluded that

issuance of the Guides would not have a significant impact on the

environment and that any such impact ``would be so uncertain that

environmental analysis would be based on speculation.'' \6\ The

Commission concluded that an environmental impact statement was

therefore not required. The Commission based its conclusions on the

findings in the environmental assessment that issuance of the guides

would have no quantifiable environmental impact because the guides are

voluntary in nature, do not preempt inconsistent state laws, are based

on the FTC's deception policy, and, when used in conjunction with the

Commission's policy of case-by-case enforcement, are intended to aid

compliance with section 5(a) of the FTC Act as that Act applies to

environmental marketing claims.

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\4\ 16 CFR 1.83.

\5\ 40 CFR 1501.3.

\6\ 16 CFR 1.83(a).

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The Commission has concluded that modifications to the guides in

this part will not have a significant effect on the environment, for

the same reasons that the issuance of the original guides in 1992 was

deemed not to have a significant effect on the environment. Therefore,

the Commission concludes that an environmental impact statement is not

required in conjunction with the 1996 modifications to the Guides for

the Use of Environmental Marketing Claims.

By direction of the Commission.

Donald S. Clark,

Secretary .

[FR Doc. 96-25938 Filed 10-10-96; 8:45 am]

BILLING CODE 6750-01-P