Guides for the Use of Environmental Marketing Claims

SUMMARY: The Federal Trade Commission (``Commission'') issued Guides

for the Use of Environmental Marketing Claims (``guides'') on July 28,

1992. The guides included a provision for public comment and review

three years after adoption to determine whether there was a need for

any modifications. In connection with this review, in July 1995 the

Commission sought public comment on a variety of issues, and held a two

day public workshop-conference on December 7 and 8, 1995. On October

11, 1996, the Commission issued revised guides, but advised that it had

not yet completed its review of the Recyclable and Compostable guides

because of ongoing relevant consumer research. One purpose of the

research was to examine whether ``recyclable'' and ``compostable''

claims continue to imply that consumers can recycle or compost the

marketed product in their own area. Further, the Commission decided to

seek additional public comment on the issue of whether product parts

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

products could be considered ``recyclable'' under the guides and

whether products made from such reconditioned and/or reused parts could

qualify as ``recycled'' under the guides. The Commission has now

completed its review of the above issues and is issuing further

amendments to the guides, as discussed below.

The Compostable guide is amended to clarify that an unqualified

compostable claim can be made if a product is compostable in a home

compost pile or device, even if municipal or institutional composting

facilities are not locally available. This is because consumers are

likely to perceive claims of compostability to mean that a product may

be composted in a home compost pile or device. The Recyclable guide is

modified to allow the term ``recyclable'' to be used for a package or

product that can be recovered from the solid waste stream for reuse or

for the manufacture of another package or product, so long as the

package or product can be collected through an established recycling

program (thus including reused, reconditioned and remanufactured

products). The guides retain the provision that, to make an unqualified

recyclable claim, recycling collection programs should be available to

a substantial majority of consumers or communities, but the Commission

is modifying the suggested qualifying statement for when an unqualified

claim is not appropriate. Further, a new example illustrates that the

phrase ``Please Recycle'' is considered equivalent to a ``recyclable''

claim. In addition, the Recycled Content guide is amended to clarify

that recycled content may consist of used, reconditioned or

remanufactured components, as well as raw materials. Finally, the

Commission is amending the guides to clarify that they apply to all

forms of marketing, including digital or electronic media, such as the

Internet and electronic mail, and to the marketing of services, as well

as products and packages.

EFFECTIVE DATE: May 1, 1998.

FOR FURTHER INFORMATION CONTACT: Janice Podoll Frankle, Attorney, (202)

326-3022, or Pablo Zylberglait, Attorney, (202) 326-3260, Division of

Enforcement, Bureau of Consumer Protection, FTC, Washington, D.C.

20580.

SUPPLEMENTARY INFORMATION:

I. Background

A. Purpose of the Guides

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. The guides indicate how the Commission will apply Section 5 of the

Federal Trade Commission Act (``FTC Act''), which prohibits unfair or

deceptive acts or practices, in the area of environmental marketing

claims. 15 U.S.C. 45. The guides apply to all forms of marketing of

products and services to the public, whether through advertisements,

labels, package inserts, promotional materials, or electronic media.

B. 1995 Federal Register Notice

When the Commission issued the guides in 1992, it included a

provision that three years after adoption, it would seek public comment

on ``whether and how the guides need to be modified in light of ensuing

developments.'' Pursuant to this provision, in a Federal Register

Notice published on July 31, 1995 (``1995 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. 60 FR

38978. The Commission also sought comment on specific issues related to

particular environmental claims addressed by the guides. In addition,

the 1995 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. The workshop was held on

December 7 and 8, 1995.

The Commission received 99 comments in response to the 1995

Notice.1 Some of those comments are relevant to the issues

presented in the October 11, 1996 Federal Register Notice (``1996

Notice''), discussed below.2

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

\1\ The comments came from 45 trade associations or trade

association coalitions; 28 manufacturers, distributors or retailers;

12 consumer, environmental or public advocacy organizations; 4 state

government officials or bodies; 2 federal government agencies or

officials; 2 certification organizations; 1 standards organization;

1 city government official; 1 individual; 1 educational institution;

1 consulting company; and 1 public-private recycling coalition.

\2\ The comments are on the Commission's public record as

Document Nos. B17512400001-B17512400099 for the 1995 Notice and

B20818700001-B2081870227 for the 1996 Notice. The comments are cited

in this Notice by the name of the commenter, reference to either the

1995 Notice or the 1996 Notice, depending on which notice(s) was

responded to by the commenter, a shortened version of the comment

number, and the relevant page(s) of the comment, e.g., Virginia

Automotive Recyclers Ass'n, 1996 Notice, #1 at 1. The transcript of

the public workshop is on the Commission's public record as Document

No. P954501. A complete list of commenters, the comments, a

transcript of the workshop proceedings, and consumer perception

studies conducted are available for inspection and copying in the

Consumer Response Center, Room 130, Federal Trade Commission, 6th &

Pennsylvania Ave., N.W., Washington, D.C. 20580.

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

C. 1996 Federal Register Notice

On October 11, 1996, the Commission published revised guides (1996

Notice), which included revisions to the prefatory sections, as well as

the following sections: General Environmental Benefits, Degradable/

Biodegradable/Photodegradable, Recycled Content, Source Reduction,

Refillable, and Ozone Safe and Ozone Friendly. 61 FR 53311. At that

time, the Commission advised that it was still in the process of

reviewing the Recyclable and Compostable guides and wanted to evaluate

the results of ongoing consumer research. The Commission also stated

that it was seeking further public comment on the issue of whether

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

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

the guides and whether products manufactured from such reconditioned

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

addition, the Commission reiterated its request for consumer

[[Page 24241]]

perception data for ``recyclable'' and ``compostable''

claims.3

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

\3\ For example, the 1995 Notice requested any empirical data

relevant to whether consumers perceive that products made from

reconditioned parts that would otherwise have been discarded should

qualify as ``recycled'' products. Further, the 1995 Notice sought

comment on certain issues relating to the Recyclable and Compostable

guides and requested any empirical data regarding whether an

unqualified recyclable or an unqualified compostable claim conveys a

claim concerning local availability of recycling or composting

programs and whether any evidence indicates that those guides should

be modified, and if so, in what manner. In addition, the 1995 Notice

stated that the available evidence suggested that certain qualifying

disclosures outlined in the Recyclable and Compostable guides may be

more effective than others in conveying to consumers that facilities

may not be available in their community to recycle or compost the

product. Thus, the Commission asked for any evidence indicating that

certain of those qualifying disclosures should be modified, and if

so, in what manner.

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

In response to the 1996 Notice, 227 comments were

received.4 Part II summarizes the comments on the 1996

Notice, and comments on the 1995 Notice that are relevant to the issues

raised in the 1996 Notice.

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

\4\ These came from 201 automotive parts dealers, ``automotive

recyclers,'' automotive salvage companies, dismantlers, wreckers and

rebuilders; 17 trade associations (11 of which represent

``automotive recyclers,'' rebuilders, and dismantlers); 2

manufacturers; 1 federal government agency; 1 public-private

recycling hotline; 1 municipal recycling and solid waste commission;

1 association of recycling managers; 1 state office of environmental

assistance; 1 non-profit public service corporation; and 1

individual.

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

D. Consumer Survey Evidence

The consumer perception survey evidence received by the Commission

is relevant to the issues raised in the 1996 Notice. The Council on

Packaging in the Environment (``COPE'') conducted a national telephone

survey in April 1996, providing evidence on whether consumers consider

products made from reconditioned parts to be ``recycled.'' COPE surveys

from March 1993, September 1993, and December 1994 provide empirical

data concerning consumers' interpretations of ``recyclable'' and

``Please Recycle'' claims. A Roper Starch Worldwide, Inc. (``Roper

Starch'') survey of consumers conducted through personal, in-home

interviews during December 1996, provides information on how recyclable

claims are interpreted. Research performed by professors from American

University, through mall-intercept interviews, provides empirical data

on consumer interpretation of recyclable claims and certain

disclosures.5

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

\5\ Although the revised guides are effective immediately, the

Commission will take into consideration the date when materials were

authorized to be printed in conformance with the former guides.

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

II. Summary of Comments and Modifications to the Guides

A. The Compostable Guide

1. Summary of Comments Regarding the Compostable Guide

Only a few comments directly addressed the Compostable guide, which

states that an unqualified compostable claim might be deceptive unless

a product can be safely composted at home and in a municipal composting

facility. The Society of the Plastics Industry, Inc. (``SPI'') stated

that home composting appears to be the primary means of composting

practiced by consumers and thus asked the Commission to clarify that an

unqualified compostable claim can be made for an item that can be

safely composted in a home compost pile or device.6 SPI

stated that it was unaware of any data indicating that a product

compostable in a home compost pile or device would not be compostable

in a municipal composting facility. SPI stated further that the lack of

municipal composting facilities near the consumer is irrelevant to the

validity of an unqualified compostable claim. SPI noted, however, that

if a product is only compostable in a municipal facility, then that

fact should be disclosed and a qualifier regarding local availability

should be used. Another commenter recommended modifying the definition

of ``compostable'' to indicate that the advertised product ``must break

down in approximately the same time as the materials it is generally

composted with.'' 7

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

\6\ SPI, 1995 Notice, #53 at 25; 1996 Notice, #70 at 2.

\7\ Mobil Chemical Co. (``Mobil''), 1995 Notice, #38 at 4. The

guide currently states that a compostable claim means that a product

will break down in a ``safe and timely manner.'' The Commission

interprets the ``timely manner'' language to mean that the product

or package will break down in approximately the same time as the

materials with which it is composted.

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

2. Modifications to the Compostable Guide

Because there are fewer than 20 municipal solid waste composting

facilities in the United States, the Commission now believes that few

consumers are likely to know about and associate a compostable claim

with municipal solid waste composting facilities.8 Moreover,

the Commission agrees with SPI that a product technically capable of

being composted in a home compost pile or device would also be

compostable in a municipal composting facility. Thus, the Compostable

guide and Example 1 have been revised to clarify that an unqualified

compostable claim can be made if a product is compostable in a home

compost pile or device even if municipal or institutional 9

composting facilities are not locally available.10 The guide

still states, however, that if a claim is made that a product is

compostable in a municipal or institutional composting facility, then

the claim may need to be qualified to the extent necessary to avoid

deception about the limited availability of composting facilities.

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

\8\ This view is supported by a 1991 University of Illinois

study about consumer perceptions of such terms as ``degradable/

biodegradable,'' ``compostable,'' ``recyclable,'' and

``environmentally friendly.'' When consumers were asked the open-

ended question, ``What does the term compostable mean?,'' 44.2% of

respondents defined compostable in terms of a home compost pile. The

study reported that consumers did not mention municipal composting

programs in their definitions of ``compostable.''

\9\ The word ``institutional'' has been added because there are

also privately operated composting facilities.

\10\ Example 3 has been deleted because revised Example 1 now

illustrates the same concept. In addition, references to ``yard

waste'' have been changed to ``yard trimmings'' because the

Environmental Protection Agency (``EPA'') advised that the latter

term is becoming more prevalent.

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

B. The Recyclable and Recycled Content Guides

1. Claims Regarding Local Availability of Recycling Facilities

a. Background. The Recyclable guide states that consumers are

likely to interpret unqualified recyclable claims to imply that

facilities are available in their community to recycle the product, and

that if facilities are not available to a substantial majority of

consumers or in a substantial majority of communities, then such claims

should be qualified. An important issue that arose in the review of the

Recyclable guide concerned whether this interpretation of an

unqualified claim is still correct. Closely related to this issue is

how consumers interpret the increasing number of claims such as

``Please Recycle'' in the marketplace, and if these claims also need

qualification when available facilities are limited.

b. Summary of Comments Regarding the Local Availability Standard

and ``Please Recycle'' Claims. The issue of how consumers interpret

unqualified recyclable claims and whether the term implies anything

about the availability of local recycling facilities provoked a wide

range of comments. A few commenters contended that no qualifications

about limited availability were necessary.11 Most of the

[[Page 24242]]

approximately 40 commenters who specifically discussed recyclable

claims, however, only favored a less restrictive approach to when the

term ``recyclable'' should be qualified. One commenter stated that the

assertion that some consumers may not understand that ``recyclable''

means that the package is recyclable only if there is a recycling

program in the community, seems to unnecessarily question the

intelligence of consumers.12 Another commenter recommended

that the Commission indicate that only claims of recyclability that

imply availability of programs (rather than recyclable claims in

general) may require qualification to the extent necessary to avoid

consumer deception about limited availability of recycling programs and

collection sites.13 Another commenter stated that the

Commission would promote dissemination of information and spur demand

for increased recycling facilities by modifying the recyclability

standards to allow claims of recyclability where a material can be

recycled by an accepted, practical method, whether or not facilities to

do so are widely available.14

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

\11\ International Dairy Foods Ass'n (``IDFA''), 1995 Notice,

#13 at 2-3; American Bakers Ass'n, 1995 Notice, #23 at 1-2;

Paperboard Packaging Council (``PPC''), 1995 Notice, #67 at 1-6.

\12\ IDFA, 1995 Notice, #13 at 2.

\13\ Grocery Manufacturers of America (``GMA''), 1995 Notice,

#59 at 10, 20.

\14\ Soap and Detergent Ass'n (``SDA''), 1995 Notice, #65 at 9.

See also Paper Recycling Coalition (``PRC''), 1995 Notice, #91 at 6

(the Commission's recyclable standard may hinder the growth of

recycling markets by limiting the recovery of materials for which

there is a demand, but for which the threshold to use an unqualified

``recyclable'' claim has not been met).

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

Commenters also recommended that the threshold for making

unqualified ``recyclable'' claims be lowered to permit such claims if

facilities are available to a significant percentage of the population

nationwide, or to a reasonable portion of the population (rather than

the current threshold of substantial majority).15 Several

commenters suggested that the Commission harmonize its guides with the

draft standards being developed within the International Organization

for Standardization (``ISO''), which would require that collection

facilities be available to a ``reasonable portion'' of the

population.16 One commenter contended that the ``reasonable

portion'' language is more manageable than the ``substantial majority''

wording in the guides and would require less cumbersome data

collection.17

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

\15\ 3M, U.S. Sub-TAG to ISO, National Ass'n of Manufacturers,

Chemical Manufacturers Ass'n (``3M''), 1995 Notice, #32 at 2

(reasonable portion); Eastman Kodak Co. (``Kodak''), 1995 Notice,

#42 at 3 (reasonable portion); American Plastics Council, 1995

Notice, #64 at 15 (significant portion); National Ass'n of

Photographic Manufacturers, Inc. (``NAPM''), 1995 Notice, #83 at 2

(reasonable portion).

\16\ 3M, 1995 Notice, #32 at 2; Kodak, 1995 Notice, #42 at 3;

NAPM, 1995 Notice, #83 at 2.

\17\ Kodak, 1995 Notice, #42 at 3.

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

In contrast, several commenters urged the Commission to retain the

current recyclable qualifications.18 EPA stated that claims

of recyclability need to be qualified as recommended in the guides

because there is no real benefit to consumers in being informed that a

product or package is technically recyclable if a program is not

available enabling them to recycle the material after use.19

EPA also stated that it would strongly oppose allowing the unqualified

use of the term ``recyclable'' unless it can be definitely proven that

such usage would not contribute to the placement of improper materials

into recycling bins.

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

\18\ Helene Curtis, Inc., 1995 Notice #8 at 3; National

Recycling Coalition Inc., 1995 Notice, #73 at 1.

\19\ EPA, 1995 Notice, #22 at 2, 5; 1996 Notice, #215 at 1-2.

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

Another commenter maintained that the substantial increase in

curbside collection programs over the past few years does not obviate

the problem because the availability of curbside collection can itself

mislead consumers about the recycling properties of certain

materials.20 A recycling association noted that false claims

of recyclability waste consumers' time both in preparing materials to

be recycled and in sorting through material not picked up because of

contamination with non-recyclables.21 The commenter stated,

for example, that its members had to explain to consumers why the

recycling crew did not take the corrugated takeout pizza boxes labeled

``recyclable,'' but which, in fact, were not recycled in the community

where the pizza was sold.

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

\20\ Aluminum Ass'n, Inc., 1995 Notice, #66 at 3-5.

\21\ Ass'n of Recycling Managers, Inc., 1995 Notice, #77 at 2,

5.

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

Another commenter urged the Commission to modify the guides to

limit the use of the unqualified claim ``recyclable'' to only those

products and materials that are accepted for recycling in the majority

of curbside recycling programs across the country or in the communities

where the product is sold or distributed, or are accepted for recycling

at the point of purchase or distribution, or have demonstrated a

recycling rate of 50% or better nationally or in the communities where

the product is sold or distributed.22 The Environmental

Defense Fund (``EDF'') stated that, to avoid consumer deception at the

point of purchase, the qualifying language accompanying a claim should

explicitly state the current extent of availability of facilities and

programs required to fulfill the claim, and therefore avoid placing the

burden on consumers to determine local availability.23 Two

university professors who conducted research on recycling claims also

suggested stronger qualifications.24

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

\22\ Californians Against Waste Foundation, 1995 Notice, #81

3.

\23\ EDF, 1995 Notice, #93 at 4.

\24\ Professors Robert N. Mayer and Brenda J. Cude (``Mayer &

Cude''), 1995 Notice, #20 at 3.

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

The comments on statements such as ``Please Recycle'' also were

mixed. Several industry commenters stated that statements like ``Please

Recycle'' are exhortations to encourage consumers to recycle and not

claims about whether a particular product is widely

recyclable.25 NSDA explained that in the soft drink

industry, the three-chasing-arrows logo is almost always displayed in

conjunction with the ``Please Recycle'' message, and the industry does

not want any special meaning to be attached to the logo or the

adjoining ``Please Recycle'' phrase, which simply asks the consumer to

consider recycling.26

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

\25\ GMA, 1995 Notice, #59 at 19 (such claims energize consumers

to recycle items that can be recycled; curbing the use of ``Please

Recycle'' might threaten upward trend of recycling rates); National

Soft Drink Ass'n (``NSDA''), 1995 Notice, #62 at 6; SDA, 1995

Notice, #65 at 9; Chemical Specialties Manufacturers Ass'n, 1995

Notice, #72 at 15.

\26\ NSDA, 1995 Notice, #62 at 6.

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

In contrast, EPA stated that it viewed ``Please Recycle'' as

similar to an unqualified claim of recyclability.27 EPA also

expressed concern that the phrase ``Please Recycle'' accompanied by the

chasing-arrows symbol may simply be an effort by marketers to display

that symbol without having to make a qualified recyclable claim. EPA

stated that such messages are so similar to a claim of recyclability

that when unqualified, they may be deceptive. University researchers

Mayer & Cude suggested revising the guides to clarify that the phrase

``Please Recycle'' is not adequate to inform consumers about a

product's recyclability.28 Several Attorneys General

recommended modifying the guides to state that the exhortation to

recycle be expressly qualified whenever collection facilities are

limited for the material in question by stating the percentage of the

population that cannot recycle the material, followed by information on

how to find out whether the material is recyclable in the consumer's

area.29

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

\27\ EPA, 1995 Notice, #22 at 2.

\28\ Mayer & Cude, 1995 Notice, #20 at 5.

\29\ Attorneys General of the States of Arizona, California,

Connecticut, Florida, Massachusetts, Minnesota, Missouri, New York,

Pennsylvania, Tennessee, Washington, and Wisconsin (``Attorneys

General''), 1995 Notice, #45 at 3.

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

[[Page 24243]]

c. Consumer Perception Data Regarding the Local Availability

Standard and ``Please Recycle'' Claims. In the December 1994 COPE

survey, respondents were asked if a ``Please Recycle'' claim on a

package meant that collection programs existed in their community to

recycle that package. Approximately one-third of consumers stated that

the ``Please Recycle'' label meant that they could recycle the product

in their community. When consumers were asked if the ``Please Recycle''

label on a package meant that the package can be recycled by consumers

in all, most, some, a few or no communities, over one-half responded

that the claim meant that the product could be recycled by consumers in

``all'' or ``most'' communities nationwide.

One question in the Roper Starch survey asked consumers if the

claim of ``recyclable package'' on a cereal box meant that there

definitely is a recycling facility for such packages in the consumers'

communities. Of the respondents, 37% thought that the ``recyclable''

claim meant that there definitely was a recycling facility in their

community, while 50% thought that there definitely was not a recycling

facility in their community.

Although the research described above provides some consumer survey

data regarding ``Please Recycle'' and local availability claims, in the

1996 Notice the Commission stated that it also wanted to evaluate the

results of ongoing consumer research related to the Recyclable and

Compostable guides. In July 1997, the Commission received the results

of that research, which was conducted by Professors Manoj Hastak and

Michael Mazis and funded by American University. Using a mall-intercept

approach, respondents were exposed to one of two product packages

(cardboard milk carton or plastic petroleum jelly jar) with one of

three different labels on the package (``Recyclable,'' ``Please

Recycle,'' or no environmental claim).

After examining one package (either milk or petroleum jelly),

respondents were asked a series of questions designed to measure their

perceptions of the package's recyclability. Consumers were asked how

likely or unlikely it is that the package can be recycled in their

community.30 Of the respondents exposed to the package

without any environmental claim, between 46% and 54% (for milk and

petroleum jelly, respectively) indicated that it was likely or

extremely likely that the package was recyclable in their community.

Over 72% of the respondents exposed to the ``recyclable'' label

indicated that it was likely or extremely likely that the package was

recyclable in their community. Over 75% of the respondents who were

shown the ``Please Recycle'' label indicated that it was likely or

extremely likely that the package was recyclable in their community.

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

\30\ The communities that were selected for this study were

chosen because neither of the product packages used in the study

could be recycled curbside in these areas; there were no known drop

off facilities in these communities that would accept either the

milk carton or the petroleum jelly jar; and the brand names of the

products were not sold locally.

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

Then, the respondents were asked how likely or unlikely it is that

the package can be recycled in most communities in the United States.

Of the respondents exposed to the package without any environmental

claim, between 40% and 46% (for milk and petroleum jelly, respectively)

indicated that it was likely or extremely likely that the package can

be recycled in most communities in the United States. Approximately 70%

of the respondents who were shown the ``recyclable'' or ``Please

Recycle'' label indicated that it was likely or extremely likely that

the package can be recycled in most communities in the United States.

d. Retention of the Local Availability Standard; Amendment of the

Recyclable Guide Regarding ``Please Recycle'' Claims. As discussed

above, recent survey data confirm that the presence of either the

``recyclable'' claim or the ``Please Recycle'' claim significantly

increased the percentage of consumers who believed the package to be

recyclable in their community and in most communities in the United

States. The large increase in responses to the ``recyclable'' and

``Please Recycle'' labels over where no claim is made shows that the

claims make a difference in consumer perception of the availability of

recycling facilities in their communities and in most United States

communities. Further, there were no statistically significant

differences in response to the two questions between the ``recyclable''

and ``Please Recycle'' groups. The Commission concludes that these

results indicate that a local availability claim is conveyed to

consumers by an unqualified ``recyclable'' claim.31 The

study further indicates that packages with the claim ``Please Recycle''

are just as likely to be perceived as recyclable as packages with the

claim ``recyclable,'' and also to convey a local availability claim.

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

\31\ This conclusion is also supported by the December 1994 COPE

survey. The Roper Starch data also shows that a significant

percentage of consumers take a local availability claim from an

unqualified ``recyclable'' claim, although a greater percentage did

not. This result may be due, at least in part, to the survey's

emphasis on the word ``definitely.''

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

Further, some commenters indicated that unqualified claims of

recyclability where there is no local availability of recycling

programs, mislead consumers into placing improper materials into

recycling bins and thus the claims can increase the costs of recycling

programs. It also was pointed out that while a product may be

technically recyclable, if a program is not available allowing

consumers to recycle the product, there is no real value to consumers.

Thus, the Commission has decided to retain the current disclosure

system for ``recyclable'' claims. Unqualified ``recyclable'' claims

should only be made when a package or product is recyclable for a

substantial majority of consumers or communities; in all other

instances, an appropriate disclosure should accompany such

claims.32

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

\32\ The Commission is cognizant that ISO's ``reasonable

portion'' environmental labeling standard went out in April 1998 for

comments and balloting and will go out for final balloting toward

the end of 1998. The Trade Agreements Act of 1979 states that any

federal agency must, in developing standards, ``take into

consideration international standards and shall, if appropriate,

base the standards on international standards.'' Trade Agreements

Act of 1979, title IV, section 402, 93 Stat. 242 (1979) (codified as

amended at 19 U.S.C. 2532(2)(A) (Supp. 1995)). Since the reasonable

portion standard has not been formally adopted (or defined) by ISO,

the Commission believes that it would be premature to contemplate

revising the substantial majority standard at this time. Of course,

at any time the Commission may alter or revise the guides based on

international developments or other relevant changes.

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

In addition, recent survey data reveal that a significant majority

of consumers equate the claim ``Please Recycle'' with unqualified

``recyclable'' claims. Accordingly, new Example 11 to the Recyclable

guide illustrates that the phrase ``Please Recycle'' is equivalent to a

``recyclable'' claim and, thus, that unqualified usage should be

limited to products that can be recycled locally by a substantial

majority of consumers or communities.

2. Safe Harbor Disclosures for Products or Packages That Are Not

Recyclable in a Substantial Majority of Communities

a. Summary of Comments Regarding Disclosures. Under the Recyclable

guide, the Commission adopted a three-tiered disclaimer approach,

depending on the availability of recycling facilities for a package or

product. The first tier is when recycling facilities are available to a

substantial majority of consumers or communities nationwide; in such

cases,

[[Page 24244]]

unqualified recyclable claims can be made. The second tier is when

facilities are available to a significant percentage of the population

or communities, but not yet to a substantial majority of consumers or

communities. In that situation, a suggested qualification is ``Check to

see if recycling facilities exist in your area.'' The third tier is

when facilities are available to less than a significant percentage of

communities or the population. Then, a recommended disclosure would be

to state that the product is only recyclable in a few communities

nationwide. Also, the guide provides that an alternative approach to

qualifications would be to disclose the approximate percentage of

communities or the population to whom recycling programs are available

for the product.

Almost half of the commenters on recyclable claims urged the

Commission to adopt different qualifiers, contending that the current

``check to see'' qualifier is too stringent. Several commenters

suggested that the Commission revise the guides to allow for the

qualifier ``recyclable--where facilities exist,'' in addition to the

``Check to see if recycling facilities exist in your area''

qualifier.33 Several commenters stated that the qualifier

``recyclable where facilities exist'' was sufficient to advise a

consumer that the product might not be recyclable in the consumer's

area.34 Commenters also favored claims such as ``recyclable

through participating photofinishers'' and ``recyclable through

participating dealers.'' 35 Another commenter urged the

Commission to streamline the lengthy qualifications for ``recyclable''

claims offered as examples in the guides.36

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

\33\ Foodservice & Packaging Institute, Inc., 1995 Notice, #63

at 8-9 (if the claims are qualified in a positive manner, the

consumer may be encouraged to seek out recycling opportunities that

exist in the community, or by requesting information, create demand

for expansion of recycling programs); Amoco Chemical Co., 1995

Notice, #35 at 2-3 (it is necessary to balance the need to inform

the consumer about recyclable products with the need to avoid

overstating the consumer's ability to recycle those products);

Mobil, 1995 Notice, #38 at 3-4 (negative qualifiers such as

``recycling programs may not exist in your area'' are

counterproductive, while positive qualifiers encourage the consumer

to seek out recycling opportunities).

\34\ Washington Legal Foundation, 1995 Notice, #84 at 3

(manufacturers may reasonably conclude that exhorting consumers to

``check to see if recycling facilities exist in your area'' is a

misuse of label and advertising space); SPI, 1996 Notice, #70 at 3.

\35\ Kodak, 1995 Notice, #42 at 3; NAPM, 1995 Notice, #83 at 2.

\36\ American Frozen Foods Institute, 1995 Notice, #85 at 3

(suggesting that manufacturers must be confident that qualifications

that use fewer words and provide less detailed information than the

Commission has suggested may be viewed as appropriate by the

agency).

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

The Ford Motor Company (``Ford'') contended that the current guides

do not adequately address the recyclability of durable goods such as

automobiles, because the guides' contemplate situations involving only

curbside or drop off recycling programs.37 Ford noted that

vehicle owners have no difficulty availing themselves of various

automotive disposal and recycling services, and therefore, recommended

that automobile manufacturers be permitted to make unqualified claims

of recyclability, even though their collection sites are not those

contemplated by the guides.

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

\37\ Ford, 1995 Comment, #29 at 4-5.

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

The U.S. Environmental Recycling Hotline (``Hotline'') suggested

that product labels using its 1-800-CLEANUP telephone number in

conjunction with a ``recyclable'' claim could be a ``safe harbor,'' if

used appropriately.38 Another commenter maintained that

companies using such terms as ``recyclable,'' ``compostable,''

``degradable,'' and ``refillable'' should be required to print a

telephone number near the claim so that confused consumers can have

their questions answered.39

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

\38\ Hotline, 1996 Notice, #216 at 2. The Hotline explained that

its telephone number provides recycling drop off center location

information and community-specific recycling education information

in all 50 states.

\39\ California Integrated Waste Management Board, 1995 Notice,

#74 at 2.

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

Several State Attorneys General stated that the ``check to see''

qualifier incorrectly implies that the most likely problem with an

unqualified recyclable claim is the possibility of there not being any

recycling facilities in the consumer's locality.40 The

Attorneys General suggested that the problem consumers are more likely

to encounter is that the recycling facilities do not collect the

material in question. They suggested that a clear, easily understood

qualification be used when collection sites for the material in

question are available to some but not all consumers or communities,

for instance, ``Not recyclable in 75% of U.S. communities. Check to see

if recyclable in your area.''

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

\40\ Attorneys General, 1995 Notice, #45 at 4.

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

b. Consumer Perception Data Regarding Recyclable Disclosures. In

the March 1993 COPE survey, half of those interviewed were asked

whether an unqualified ``recyclable'' claim meant that collection

programs existed in their community to recycle the product, and the

other half were asked the same question with the qualified

``Recyclable--check to see if recycling facilities exist in your area''

disclosure. In each case, more than 40% of respondents answered ``yes''

(i.e., the claim meant that collection programs existed in their

community to recycle the product), regardless of whether they were

exposed to the unqualified or qualified claim. There was no

statistically significant difference between the two responses (46% for

the unqualified claim; 43% for the qualified claim). The Commission

believes that these results indicate that the ``check to see''

disclosure may not be effective in conveying to consumers that local

facilities may not be available to recycle the product.

In the September 1993 survey, COPE tested a qualification similar

to that recommended in the Compostable guide when facilities are

available to a significant percentage, but not a substantial majority

of the population (i.e., ``Appropriate facilities may not exist in your

area''). Half of those questioned were asked whether an unqualified

``recyclable'' claim meant that recycling programs for the product

existed in their community and the other half were asked the same

question when exposed to the claim: ``Recyclable--recycling programs

for this bottle may not exist in your area.'' Of those exposed to the

unqualified claim, 45% responded that the claim meant that facilities

existed in their area, and 48% responded that it did not. Of consumers

exposed to the qualified claim, ``Recyclable--recycling programs for

this bottle may not exist in your area,'' 29% responded that it meant

that recycling programs for that bottle existed in their area, and 59%

responded that the claim did not mean that recycling programs existed

in their area. The Commission believes that these results indicate that

the more cautionary disclosure, i.e., ``Recycling programs [for this

product] may not exist in your area,'' is more successful in conveying

to consumers that facilities may not be available locally, than the

``Check to see if recycling facilities exist in your area'' disclosure.

c. Amendments Regarding Safe Harbor Recyclable Disclosures. Based

on the comments and the consumer perception data discussed above that

found that the ``check to see'' qualification did not significantly

change consumers'' perceptions of local availability of collection

sites when compared with an unqualified ``recyclable'' claim, the

Commission is withdrawing the safe harbor ``Check to see if recycling

facilities exist in your area.'' The Commission also concludes that the

alternatives suggested by some commenters, such as ``recyclable where

facilities exist'' would be inadequate to change consumer perception.

In

[[Page 24245]]

particular, this alternative would suffer from the problem identified

by the Attorneys General in that such a claim could imply that if any

facility exists in a consumer's community, then the item is recyclable,

when, in fact, that facility may not recycle the product. Example 4 of

the Recyclable guide (where this issue is presented) has been revised

to suggest the following types of disclosures: ``Recycling programs for

this bottle [product or packaging] may not exist in your area'' or

``This bottle [product or packaging] may not be recyclable in your

area.'' 41 Because the new safe harbors are tied to the

marketed product as opposed to recycling programs generally, they

reduce the possibility that consumers may infer that because a

recycling program exists in their area, that any product represented as

``recyclable'' can, in fact, be recycled in their local program.

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

\41\ The new qualifications also are consistent with the one

suggested in the Compostable guide: ``Appropriate facilities may not

exist in your area.''

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

3. Reused and/or Reconditioned Parts Marketed as ``Recycled'' or

``Recyclable''

a. Background. In the 1995 Notice, 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 that request, but did

receive several comments that discussed the issue. In the 1996 Notice,

the Commission stated that it had determined to give further

consideration to the 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.

At that time, the Recycled Content guide defined ``recycled

content'' as material that a marketer can substantiate has been

recovered or otherwise diverted from the waste stream. This definition

could be interpreted to include products made from reconditioned and/or

reused parts, as well as products made from products converted into raw

materials, such as steel made from melted down cans. The 1996 Notice

pointed out, however, that the Recyclable guide stated 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.'' Thus, the 1996 Notice concluded that 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.

b. Summary of Comments Regarding Reused and/or Reconditioned Parts

as ``Recycled'' or ``Recyclable''. There was a consensus among those

commenting that reused and/or reconditioned automotive parts should be

permitted to be called ``recycled.'' Approximately 207 comments to the

1996 Notice were patterned after, or similar to, a form letter from the

Automotive Recyclers Association (``ARA''), a trade association

representing automotive parts dealers, ``automotive recyclers,''

automotive salvage companies, dismantlers, and wreckers.42

These commenters stated that the automotive recycling industry has been

a pioneer in the recycling movement for over 50 years and that the

products they sell have been and must continue to be described as

``recycled.'' They contended that by using viable parts removed from

vehicles bound for the waste stream, their products are reintroduced

into commerce without wasting additional natural resources. The used

automotive parts dealers, dismantlers, and salvage companies commented

that they consider themselves to be ``professional automotive

recyclers'' 43 and one stated that ``recycled'' was the

automotive industry's term first, before everyone else ``jumped on the

environmental bandwagon.'' 44

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

\42\ Attached to many of these letters were petitions containing

the names and addresses of customers who stated: ``[I] support

reused parts being described as ``recycled.'' I understand the

quality of the product I am buying when it is advertised as

``recycled'' and believe the service this company provides should

continue to be recognized as recycling.'' Approximately 2,190 names

of customers were on the petitions. See, e.g., Branch Auto Parts,

1996 Notice, #38 at 2; Alliance Auto Parts Inc., 1996 Notice, #48 at

2.

\43\ See, e.g., B & K Auto Salvage, 1996 Notice, #124 at 1;

Greensboro Auto Parts Co., Inc., 1996 Notice, #128 at 1; EL & M Auto

Recycling, Inc., 1996 Notice, #161 at 1; Automotive Parts Rebuilders

Ass'n (``APRA''), 1996 Notice, #102 at 4 (noting also that many used

automotive parts dealers have the word ``recycling,'' or some

variation of it, in their names).

\44\ BIG Truck Salvage, Inc., 1996 Notice, #77 at 1.

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

Several commenters said that customers are not confused when they

buy a ``recycled'' automotive part because they realize that they are

getting a used part for less money, i.e., used automotive parts cost

30-90% of the price of new parts.45 Other commenters said

recycled parts give consumers an alternative repair option and help

reduce the unnecessary production of new parts.46 Some

commenters noted that recycling automotive parts also helps keep

vehicle insurance affordable because automotive recyclers buy damaged

vehicles from insurance companies and resell the recycled parts

(indirectly) to insurance companies to repair other damaged

vehicles.47 Another commenter suggested that the sale of

many used parts as component assemblies, such as complete engine

assemblies, reduces installation time and thus saves labor

costs.48 That commenter also pointed out that the automotive

dismantler may be the only source of parts for the consumer who owns an

older vehicle.

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

\45\ Georgia Automotive Recyclers Ass'n, 1996 Notice, #117 at 1;

Bliss Auto Wreckers, 1996 Notice, #118 at 1. See also Michael W.

Gibson, Ft. Worth, TX, Controller of the following companies: AAA

Small Car World, Auto Recyclers of Houston, Budget American & Import

Auto Parts, All Auto Recyclers of San Antonio, Auto Recyclers of

Austin and Auto Recyclers of Ft. Worth (``Michael W. Gibson''), 1996

Notice, #78 at 1 (customers are not generally confused when products

are described as ``recycled,'' because they are almost always

referred to as ``recycled used parts''; these parts cost 50% or

less, of the cost of a new or rebuilt/remanufactured part); Palmer's

Auto Salvage (``Palmer's''), 1996 Notice, #43 at 3 (30-60%); Arizona

Automotive Recyclers Ass'n (``Arizona Recyclers''), 1996 Notice, #99

at 2 (50%).

\46\ See, e.g., Midway Auto Parts, 1996 Notice, #2 at 1;

Autosalvage of Ithaca Inc., 1996 Notice, #40 at 1; Cousineau Auto

Inc., 1996 Notice, #85 at 1.

\47\ Route 19 Auto Salvage Inc., 1996 Notice, #39 at 1; Lynnwood

Auto Wreckers Incorporated, 1996 Notice, #59 at 1. See also

Pennsylvania Automotive Recycling Trade Society, 1996 Notice, #15 at

1; Palmer's, 1996 Notice, #43 at 11; Don's Automotive Mall, Inc.

(``Don's''), 1996 Notice, #92 at 10; Arizona Recyclers, 1996 Notice,

#99 at 2.

\48\ Don's, 1996 Notice, #92 at 4.

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

ARA stated that the Commission should consider the impact on the

used automotive parts industry if it does not permit reused parts to be

labeled as ``recycled,'' and suggested that failure to do so would

provide an unfair competitive advantage for products made from recycled

raw materials.49 ARA therefore recommended revising the

Recyclable guide to incorporate reused automotive components as a

qualifying use for the term ``recyclable.'' 50 ARA further

suggested that reused automotive parts should be included in the

guidance regarding the Recycled Content guide.

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

\49\ ARA, 1996 Notice, #101 at 8.

\50\ ARA, 1995 Notice, #71 at 2, 6. See also ARA, 1996 Notice,

#101 at 1-9.

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

In contrast, PRC expressed concern that any expansion of the term

``recycling'' would confuse consumers because they would have no means

of distinguishing between used or remanufactured products and newly

manufactured products made from raw

[[Page 24246]]

materials.51 Similarly, Pitney Bowes, while favoring an

expansion of the use of ``recycled'' and ``recyclable,'' urged the

Commission to distinguish among products that are made from

reconditioned parts, reused parts, and remanufactured parts because

they differ in specifications, product disclosures to the consumer,

warranties, and manufacturing processes.52 Ford pointed out

that in the automotive industry, the use of the term ``recycled''

generally means that a part has been removed from a scrap vehicle and

resold with little or no work performed on it.53 A

``remanufactured'' part, in contrast, has undergone substantial

cleaning, repair and reworking and under industry practice this part

would not be considered ``recycled.'' Because restoration work has been

performed on rebuilt and remanufactured parts, while recycled vehicle

parts are often sold ``as is,'' APRA noted that some rebuilders may not

desire to use the term ``recycled,'' but they should not be precluded

from doing so.54

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

\51\ PRC, 1996 Notice, #100 at 1-2.

\52\ Pitney Bowes, 1996 Notice, #218 at 3.

\53\ Ford, 1995 Notice, #29 at 6. See also Michael W. Gibson,

1996 Notice, #78 at 1 (a recycled part is a used part placed back in

service, but rebuilt or remanufactured parts are not referred to as

``recycled'' in the automotive industry).

\54\ APRA, 1996 Notice, #102 at 7.

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

Several commenters urged the Commission to allow the application of

``recycled'' and ``recyclable'' to other remanufactured and reused

products that are not broken down to raw materials before being reused.

These commenters noted that reused, reconditioned and remanufactured

parts are important components of many products, such as office

copiers, one-time use cameras and mailing machines.55 Kodak

noted that it has developed a reuse program for its one-time use

cameras in which it reconditions and reuses, or breaks down into raw

materials, 86% of a used camera by weight for use in the manufacture of

new one-time use cameras.56 Kodak contended that because

collection of this sort of reused material diverts products from the

waste stream, those products should qualify as

``recyclable.''57

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

\55\ Kodak, 1995 Notice, #42 at 2; 1996 Notice, #95 at 2; Pitney

Bowes, 1996 Notice, #218 at 4-7.

\56\ Kodak, 1995 Notice, #42 at 2. Kodak stated that statistics

show that at least half of all cameras it distributes are returned

to the company for this recycling. See also Kodak, 1996 Notice, #95

at 2.

\57\ Kodak, 1995 Notice, #42 at 2. See also Kodak, 1996 Notice,

#95 at 2 (noting that other products, such as the so-called ``end of

life'' office equipment products, are also recovered and converted

into equivalent salable products).

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

ARA pointed out that many states, including New Jersey, Missouri,

Minnesota, Maine, Louisiana, Kentucky, Georgia, and Florida, have

acknowledged in their statutes that recycling encompasses all efforts,

including reuse, to remove solid waste from the waste

stream.58 ARA stated that the Commission should provide

incentives for all methods of recycling, as long as the goal of

conserving natural resources and diverting waste is achieved. Other

commenters noted that the draft ISO standard allows products that are

diverted from the waste stream and returned to use in the form of raw

materials or products to be considered ``recyclable,'' and urged the

Commission to adopt a similar approach.59

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

\58\ ARA, 1996 Notice, #101 at 8.

\59\ 3M, 1995 Notice, # 32 at 9; Kodak, 1995 Notice, #42 at 3.

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

c. Quality Standards for Reused and Remanufactured Parts. The 1996

Notice asked whether consumers generally perceive that the term

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

whether consumers' concerns about product quality differ depending on

whether a product is made from reconditioned and/or reused parts

recovered from the solid waste stream versus from materials recovered

from the solid waste stream and converted into raw materials. The 1996

Notice also asked if consumer perception about whether a product is or

is not ``recycled'' would 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. The notice further asked what evidence

should be required to show ``substantial equivalency,'' and if

consumers are likely to be deceived about the quality of products made

from reconditioned and/or reused parts if they are advertised as

``recycled.''

Several commenters discussed the quality of reused or reconditioned

products as it relates to recyclability and recycled

content.60 SPI suggested that substantial quality

equivalency should be required, and that reliance on applicable

government or industry standards for such products might be a way to

demonstrate such equivalency.

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

\60\ See, e.g., SPI, 1996 Notice, #70 at 3; APRA, 1996 Notice,

#102 at 3-5.

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

By contrast, APRA noted that the sections of the guides relating to

recyclability and recycled content currently do not mention quality and

stated there is no reason why a product should have to demonstrate a

particular quality, much less a comparability to new products, before

being allowed to use the designation ``recycled'' or

``recyclable.''61 APRA contended that those designations

describe environmental attributes and not the quality of a product, and

should not be used to denote quality. APRA noted that quality standards

for rebuilt and remanufactured motor vehicle parts are already

reflected in the Commission's Guides for the Rebuilt, Reconditioned and

Other Used Automotive Parts Industry, 16 CFR Part 20. Kodak suggested

that any concerns about product quality could be addressed through the

responsible use of product warranties extended by

manufacturers.62

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

\61\ APRA, 1996 Notice, #102 at 3-5.

\62\ Kodak, 1996 Notice, #95 at 3.

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

d. Consumer Perception Data Regarding Reconditioned Products as

``Recycled''. The 1995 Notice requested empirical evidence addressing

the issue of whether consumers perceive that products made from

reconditioned parts that would otherwise have been discarded should

qualify as ``recycled'' products. In the April 1996 COPE survey,

consumers were asked whether they considered products made from certain

materials to be ``recycled.'' Seventy-one percent stated that a

television set made from reconditioned parts taken from used

televisions is ``recycled,'' while 25% said the reconditioned

television set was ``not recycled.'' The Commission believes that these

results suggest that a large majority of consumers consider

reconditioning to be a form of ``recycling.''

e. Expansion of the Recyclable Guide to Include Reused and/or

Reconditioned Products. The majority of those commenting on the

Recyclable guide supported its relaxation, and it was pointed out that

such relaxation would be consistent with the laws of various states.

Commenters pointed out that because the breakdown of a product into raw

materials consumes more energy than reuse of that product, reused,

reconditioned and remanufactured components diverted from the solid

waste stream are even more beneficial to the environment than diverted

components that are broken down into raw materials.

The Commission has therefore expanded the ``recyclable'' definition

to include any package or product that can be collected, separated or

otherwise recovered from the solid waste stream for ``reuse,'' or for

the manufacture or assembly of ``another'' (not necessarily new)

package or product, so long as the package or product can be collected

``through an established recycling program.'' The phrase ``through an

[[Page 24247]]

established recycling program'' has been added to the recyclable

definition to indicate that the expanded definition does not encompass

all goods with a potential for reuse of any kind. For a product to be

called ``recyclable,'' there must be an established recycling program,

municipal or private, through which the product will be converted into,

or used in, another product or package.

New Examples 9 and 10 illustrate the expansion of the Recyclable

guide. Example 9 deals with manufacturers or retailers that collect and

recycle their own products. The example allows a ``recyclable'' claim,

even if no municipal recycling program exists, if the manufacturer or

retailer: (a) sets up a collection and recycling program for that

product, and (b) explains that the product is recyclable through that

non-municipal (or private) program. Example 10 indicates that the

disclosure requirements regarding local availability of municipal

recycling facilities also apply to non-municipal recycling programs.

f. Clarification of the Term ``Recycled Content''. The 1996 Notice

explained that the term ``recycled content'' referred to material that

a marketer can substantiate has been recovered or otherwise diverted

from the waste stream. Although this could be interpreted to include

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

products made from products converted into raw materials, such as steel

from melted down cans, the Commission did not endorse this

interpretation because the Recyclable guide unambiguously stated that

for something to be ``recyclable'' it must be diverted from the solid

waste stream and actually reprocessed into raw materials before reuse.

This has now been changed.

For the reasons discussed in this section, the Recycled Content

guide has been clarified to expressly encompass used, reconditioned,

and remanufactured components, as well as raw materials. The revised

Recycled Content guide now also states that manufacturers and retailers

must disclose the nature of the recycled content, unless such content

consists solely of raw materials, or it would be clear to consumers

from the context that a product contains used, reconditioned, or

remanufactured components. The Commission believes that whether the

product being purchased is new (including a product made from recycled

raw materials) or is made from used, reconditioned, or remanufactured

components is a fact material to consumers' purchasing decisions. In

certain instances, it will be evident to consumers that the product is

not new (e.g., if the product is purchased from a secondhand store, or

if the product is an automotive part that has been purchased from an

automotive dismantler). In those cases, no disclosure of the used

nature of the product's recycled content would be necessary because it

is clear from the context of the claim that the recycled content

consists of used, reconditioned, or remanufactured components. In cases

where it is not apparent from the context that the product is not new,

however, to avoid consumer deception, the marketer should disclose the

used, reconditioned, or remanufactured nature of the product's recycled

content. Although the prior use of a product might be less important to

consumers' purchasing decisions where substantial equivalency to a new

item or an item made from recycled raw materials could be established,

at the present time the record does not contain evidence that objective

standards for determining substantial equivalency exist for many

products. Moreover, in certain cases, there may not even be a

comparable item made from recycled raw materials.

New Example 11 illustrates the use of an appropriate qualifier for

a product that contains both recycled raw materials and reconditioned

parts. Under that example, the percentage of materials composed of

reconditioned parts should be disclosed. A consumer could then

correctly assume that the remaining percentage consists of recycled raw

materials.

New Example 12 deals with the use of a ``recycled'' label when it

would not be clear to a consumer that the product at issue was used. In

such a case, the product should be labeled to convey to a consumer that

the product was used in order to avoid consumer deception.

New Example 13 illustrates the deceptive use of a ``recycled''

label when it would not be clear to a consumer that the product at

issue contains recycled reconditioned parts. Such a label should

clearly convey that the product contains recycled reconditioned parts

to avoid deceiving consumers about the nature of that product's

recycled content.

New Examples 14 and 15 concern the automotive parts market. As

discussed above, in the used automotive parts market, consumers

understand that certain recycled automotive parts are used parts that

have not undergone any type of repair, rebuilding, or remanufacturing.

Example 14, which involves a used automotive part, illustrates that in

such a situation the unqualified use of the word ``recycled'' would not

be deceptive. Example 15 deals with rebuilt, reconditioned, or

remanufactured automotive parts that are labeled as ``recycled.'' Some

commenters pointed out that because reconditioned, rebuilt, and

remanufactured parts have had restorative work performed on them, some

dealers may not want to use the ``recycled'' label (as it connotes to

some consumers that the part is used and has not undergone any

restoration). The Commission believes that dealers of reconditioned,

rebuilt, and remanufactured parts should nevertheless be permitted to

use the ``recycled'' label if they so desire. Example 15 illustrates

the types of disclosures that are appropriate for use with those parts

that bear a ``recycled'' label.

4. Additional Amendments to the Recyclable Guide

a. The Mercury-Containing and Rechargeable Battery Management Act.

The Mercury-Containing and Rechargeable Battery Management Act of 1996

(``Battery Act'') establishes uniform national labeling requirements

regarding rechargeable nickel-cadmium and some lead-acid batteries, to

aid in battery collection recycling. 42 U.S.C. 14301 et seq. Under the

Battery Act, rechargeable nickel-cadmium and some lead-acid

rechargeable batteries must be labeled with the three-chasing-arrows

symbol or a comparable symbol. Additionally, rechargeable nickel-

cadmium batteries must contain the phrase: ``BATTERY MUST BE RECYCLED

OR DISPOSED OF PROPERLY.'' 42 U.S.C. 14322(b). Each regulated lead-acid

battery must contain the words: ``LEAD,'' ``RETURN,'' and ``RECYCLE.''

If the regulated battery is sealed, it must contain the phrase:

``BATTERY MUST BE RECYCLED.'' 42 U.S.C. 14322(b). The Commission

believes that batteries labeled in accordance with the statute's

requirements satisfy the guides' disclosure provisions and therefore

the Recyclable guide now includes a footnote stating that batteries

labeled in accordance with the Battery Act are deemed to be in

compliance with the guides.

b. Example Regarding Use of the SPI Code. Example 2 of the

Recyclable guide states that the placement of the SPI code in an

inconspicuous part of a package or product does not constitute a

recyclability claim. That example has been clarified to emphasize that

the placement of an SPI code in a conspicuous location may constitute a

claim of recyclability, and thus, may have to be qualified to disclose

the

[[Page 24248]]

limited availability of recycling programs for that package or product.

c. Update of Examples 5 and 6. Examples 5 and 6 have been updated

by including products that better illustrate the current level of local

recyclability described in each example.

C. Clarification Regarding Applicability of the Guides to the Marketing

of Services, and to All Forms of Electronic Advertising

The Commission has determined to make minor amendments to the

language in Sections 260.2, 260.5, 260.6(b) and 260.7(a) to clarify

that the guides apply to the marketing of services because

environmental claims also are being made in the marketing of services

and there is no reason to limit the applicability of the guides to only

products or packages. Furthermore, the Commission has made a minor

amendment to Section 260.2 to clarify that the guides apply to all

forms of electronic advertising, including marketing through digital or

electronic means, such as the Internet or electronic mail.

III. Text of Modified Guides

List of Subjects in 16 CFR Part 260

Advertising, Environmental claims, Labeling, Trade practices.

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

amended as follows:

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

1. The authority citation for Part 260 continues to read as

follows:

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

2. Section 260.2 is revised to read as follows:

Sec. 260.2 Scope of guides.

(a) 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, including marketing through digital or electronic

means, such as the Internet or electronic mail. The guides apply to any

claim about the environmental attributes of a product, package or

service in connection with the sale, offering for sale, or marketing of

such product, package or service for personal, family or household use,

or for commercial, institutional or industrial use.

(b) 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 preclude Commission law

enforcement action under Section 5.

3. Section 260.5 is revised to read as follows:

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.1 In addition, any party making an express or

implied claim that presents an objective assertion about the

environmental attribute of a product, package or service 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 (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 Consumer Response

Center at (202) 326-2222.

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

\1\ 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'').

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

4. Section 260.6 is amended by revising paragraphs (a) and (b) (the

examples are unchanged) to read as follows:

Sec. 260.6 General principles.

* * * * *

(a) Qualifications and disclosures. The Commission traditionally

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

disclosures such as those described in these guides should be

sufficiently clear, prominent and understandable 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, package and service.

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, a service or

to a portion or component of the product, package or service. 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.

* * * * *

5. Footnotes 4, 5 and 6 of Sec. 260.8 are redesignated as footnotes

7, 8 and 9 and Sec. 260.7 is amended by revising the introductory text,

paragraph (a) (the examples are unchanged), paragraphs (c) and (d), and

paragraph (e) and its example 10, and by adding examples 11 through 15

for paragraph (e), to read as follows:

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.2

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

\2\ 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.

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

[[Page 24249]]

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

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

service 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,

package or service has specific and far-reaching environmental

benefits. As explained in the Commission's Advertising 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 or service 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.

* * * * *

(c) Compostable. (1) It is deceptive to misrepresent, directly or

by implication, that a product or package is compostable. A claim that

a product or package is compostable should be substantiated by

competent and reliable scientific evidence that all the materials in

the product or package will break down into, or otherwise become part

of, usable compost (e.g., soil-conditioning material, mulch) in a safe

and timely manner in an appropriate composting program or facility, or

in a home compost pile or device. Claims of compostability should be

qualified to the extent necessary to avoid consumer deception. An

unqualified claim may be deceptive if:

(i) The package cannot be safely composted in a home compost pile

or device; or

(ii) The claim misleads consumers about the environmental benefit

provided when the product is disposed of in a landfill.

(2) A claim that a product is compostable in a municipal or

institutional composting facility may need to be qualified to the

extent necessary to avoid deception about the limited availability of

such composting facilities.

Example 1: A manufacturer indicates that its unbleached coffee

filter is compostable. The unqualified claim is not deceptive

provided the manufacturer can substantiate that the filter can be

converted safely to usable compost in a timely manner in a home

compost pile or device. If this is the case, it is not relevant that

no local municipal or institutional composting facilities exist.

Example 2: A lawn and leaf bag is labeled as ``Compostable in

California Municipal Yard Trimmings Composting Facilities.'' The bag

contains toxic ingredients that are released into the compost

material as the bag breaks down. The claim is deceptive if the

presence of these toxic ingredients prevents the compost from being

usable.

Example 3: A manufacturer makes an unqualified claim that its

package is compostable. Although municipal or institutional

composting facilities exist where the product is sold, the package

will not break down into usable compost in a home compost pile or

device. To avoid deception, the manufacturer should disclose that

the package is not suitable for home composting.

Example 4: A nationally marketed lawn and leaf bag is labeled

``compostable.'' Also printed on the bag is a disclosure that the

bag is not designed for use in home compost piles. The bags are in

fact composted in yard trimmings composting programs in many

communities around the country, but such programs are not available

to a substantial majority of consumers or communities where the bag

is sold. The claim is deceptive because reasonable consumers living

in areas not served by yard trimmings programs may understand the

reference to mean that composting facilities accepting the bags are

available in their area. To avoid deception, the claim should be

qualified to indicate the limited availability of such programs, for

example, by stating, ``Appropriate facilities may not exist in your

area.'' Other examples of adequate qualification of the claim

include providing the approximate percentage of communities or the

population for which such programs are available.

Example 5: A manufacturer sells a disposable diaper that bears

the legend, ``This diaper can be composted where solid waste

composting facilities exist. There are currently [X number of] solid

waste composting facilities across the country.'' The claim is not

deceptive, assuming that composting facilities are available as

claimed and the manufacturer can substantiate that the diaper can be

converted safely to usable compost in solid waste composting

facilities.

Example 6: A manufacturer markets yard trimmings bags only to

consumers residing in particular geographic areas served by county

yard trimmings composting programs. The bags meet specifications for

these programs and are labeled, ``Compostable Yard Trimmings Bag for

County Composting Programs.'' The claim is not deceptive. Because

the bags are compostable where they are sold, no qualification is

required to indicate the limited availability of composting

facilities.

(d) Recyclable. It is deceptive to misrepresent, directly or by

implication, that a product or package is recyclable. A product or

package should not be marketed as recyclable unless it can be

collected, separated or otherwise recovered from the solid waste stream

for reuse, or in the manufacture or assembly of another package or

product, through an established recycling program. Unqualified claims

of recyclability for a product or package may be made if the entire

product or package, excluding minor incidental components, is

recyclable. For products or packages that are made of both recyclable

and non-recyclable components, the recyclable claim should be

adequately qualified to avoid consumer deception about which portions

or components of the product or package are recyclable. Claims of

recyclability should be qualified to the extent necessary to avoid

consumer deception about any limited availability of recycling programs

and collection sites. If an incidental component significantly limits

the ability to recycle a product or package, a claim of recyclability

would be deceptive. A product or package that is made from recyclable

material, but, because of its shape, size or some other attribute, is

not accepted in recycling programs for such material, should not be

marketed as recyclable.4

\4\ The Mercury-Containing and Rechargeable Battery Management

Act establishes uniform national labeling requirements regarding

certain types of nickel-cadmium rechargeable and small lead-acid

rechargeable batteries to aid in battery collection and recycling.

The Battery Act requires, in general, that the batteries must be

labeled with the three-chasing-arrows symbol or a comparable

recycling symbol, and the statement ``Battery Must Be Recycled Or

Disposed Of Properly.'' 42 U.S.C. 14322(b). Batteries labeled in

accordance with this federal statute are deemed to be in compliance

with these guides.

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

Example 1: A packaged product is labeled with an unqualified

claim, ``recyclable.'' It is unclear from the type of product and

other context whether the claim refers to the product or its

package. The unqualified claim is likely to convey to reasonable

consumers that all of both the product and its packaging that remain

after normal use of the product, except for minor, incidental

components, can be recycled. Unless each such message can be

substantiated, the claim should be qualified to indicate what

portions are recyclable.

Example 2: A nationally marketed 8 oz. plastic cottage-cheese

container displays the Society of the Plastics Industry (SPI) code

(which consists of a design of arrows in a triangular shape

containing a number and abbreviation identifying the component

plastic resin) on the front label of the container, in close

proximity to the product name and logo. The manufacturer's

conspicuous use of the SPI code in this manner constitutes a

recyclability claim. Unless recycling facilities for this container

are available to a substantial majority of consumers or communities,

the claim should be qualified to disclose the limited availability

of recycling programs for the container. If the SPI code, without

more, had been placed in an inconspicuous location on the container

(e.g., embedded in the bottom of the container) it would not

constitute a claim of recyclability.

Example 3: A container can be burned in incinerator facilities

to produce heat and power. It cannot, however, be recycled into

[[Page 24250]]

another product or package. Any claim that the container is

recyclable would be deceptive.

Example 4: A nationally marketed bottle bears the unqualified

statement that it is ``recyclable.'' Collection sites for recycling

the material in question are not available to a substantial majority

of consumers or communities, although collection sites are

established in a significant percentage of communities or available

to a significant percentage of the population. The unqualified claim

is deceptive because, unless evidence shows otherwise, reasonable

consumers living in communities not served by programs may conclude

that recycling programs for the material are available in their

area. To avoid deception, the claim should be qualified to indicate

the limited availability of programs, for example, by stating ``This

bottle may not be recyclable in your area,'' or ``Recycling programs

for this bottle may not exist in your area.'' Other examples of

adequate qualifications of the claim include providing the

approximate percentage of communities or the population to whom

programs are available.

Example 5: A paperboard package is marketed nationally and

labeled, ``Recyclable where facilities exist.'' Recycling programs

for this package are available in a significant percentage of

communities or to a significant percentage of the population, but

are not available to a substantial majority of consumers. The claim

is deceptive because, unless evidence shows otherwise, reasonable

consumers living in communities not served by programs that recycle

paperboard packaging may understand this phrase to mean that such

programs are available in their area. To avoid deception, the claim

should be further qualified to indicate the limited availability of

programs, for example, by using any of the approaches set forth in

Example 4 above.

Example 6: A foam polystyrene cup is marketed as follows:

``Recyclable in the few communities with facilities for foam

polystyrene cups.'' Collection sites for recycling the cup have been

established in a half-dozen major metropolitan areas. This

disclosure illustrates one approach to qualifying a claim adequately

to prevent deception about the limited availability of recycling

programs where collection facilities are not established in a

significant percentage of communities or available to a significant

percentage of the population. Other examples of adequate

qualification of the claim include providing the number of

communities with programs, or the percentage of communities or the

population to which programs are available.

Example 7: A label claims that the package ``includes some

recyclable material.'' The package is composed of four layers of

different materials, bonded together. One of the layers is made from

the recyclable material, but the others are not. While programs for

recycling this type of material are available to a substantial

majority of consumers, only a few of those programs have the

capability to separate the recyclable layer from the non-recyclable

layers. Even though it is technologically possible to separate the

layers, the claim is not adequately qualified to avoid consumer

deception. An appropriately qualified claim would be, ``includes

material recyclable in the few communities that collect multi-layer

products.'' Other examples of adequate qualification of the claim

include providing the number of communities with programs, or the

percentage of communities or the population to which programs are

available.

Example 8: A product is marketed as having a ``recyclable''

container. The product is distributed and advertised only in

Missouri. Collection sites for recycling the container are available

to a substantial majority of Missouri residents, but are not yet

available nationally. Because programs are generally available where

the product is marketed, the unqualified claim does not deceive

consumers about the limited availability of recycling programs.

Example 9: A manufacturer of one-time use photographic cameras,

with dealers in a substantial majority of communities, collects

those cameras through all of its dealers. After the exposed film is

removed for processing, the manufacturer reconditions the cameras

for resale and labels them as follows: ``Recyclable through our

dealership network.'' This claim is not deceptive, even though the

cameras are not recyclable through conventional curbside or drop off

recycling programs.

Example 10: A manufacturer of toner cartridges for laser

printers has established a recycling program to recover its

cartridges exclusively through its nationwide dealership network.

The company advertises its cartridges nationally as ``Recyclable.

Contact your local dealer for details.'' The company's dealers

participating in the recovery program are located in a significant

number--but not a substantial majority--of communities. The

``recyclable'' claim is deceptive unless it contains one of the

qualifiers set forth in Example 4. If participating dealers are

located in only a few communities, the claim should be qualified as

indicated in Example 6.

Example 11: An aluminum beverage can bears the statement

``Please Recycle.'' This statement is likely to convey to consumers

that the package is recyclable. Because collection sites for

recycling aluminum beverage cans are available to a substantial

majority of consumers or communities, the claim does not need to be

qualified to indicate the limited availability of recycling

programs.

(e) Recycled content. (1) 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.

(2) It is deceptive to misrepresent, directly or by implication,

that a product or package is made of recycled material, which includes

recycled raw material, as well as used,5 reconditioned and

remanufactured components. Unqualified claims of recycled content may

be made 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. Additionally, for products that contain used, reconditioned or

remanufactured components, a recycled claim should be adequately

qualified to avoid consumer deception about the nature of such

components. No such qualification would be necessary in cases where it

would be clear to consumers from the context that a product's recycled

content consists of used, reconditioned or remanufactured components.

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

\5\ The term ``used'' refers to parts that are not new and that

have not undergone any type of remanufacturing and/or

reconditioning.

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

* * * * *

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.

Example 11: A laser printer toner cartridge containing 25%

recycled raw materials and 40% reconditioned parts is labeled ``65%

recycled content; 40% from reconditioned parts.'' This claim is not

deceptive.

Example 12: A store sells both new and used sporting goods. One

of the items for sale in the store is a baseball helmet that,

although used, is no different in appearance than a brand new item.

The helmet bears an unqualified ``Recycled'' label. This claim is

deceptive because, unless evidence shows otherwise, consumers could

reasonably believe that the helmet is made of recycled raw

materials, when it is in fact a used item. An acceptable claim would

bear a disclosure clearly stating that the helmet is used.

[[Page 24251]]

Example 13: A manufacturer of home electronics labels its video

cassette recorders (``VCRs'') as ``40% recycled.'' In fact, each VCR

contains 40% reconditioned parts. This claim is deceptive because

consumers are unlikely to know that the VCR's recycled content

consists of reconditioned parts.

Example 14: A dealer of used automotive parts recovers a

serviceable engine from a vehicle that has been totaled. Without

repairing, rebuilding, remanufacturing, or in any way altering the

engine or its components, the dealer attaches a ``Recycled'' label

to the engine, and offers it for resale in its used auto parts

store. In this situation, an unqualified recycled content claim is

not likely to be deceptive because consumers are likely to

understand that the engine is used and has not undergone any

rebuilding.

Example 15: An automobile parts dealer purchases a transmission

that has been recovered from a junked vehicle. Eighty-five percent

by weight of the transmission was rebuilt and 15% constitutes new

materials. After rebuilding 6 the transmission in

accordance with industry practices, the dealer packages it for

resale in a box labeled ``Rebuilt Transmission,'' or ``Rebuilt

Transmission (85% recycled content from rebuilt parts),'' or

``Recycled Transmission (85% recycled content from rebuilt parts).''

These claims are not likely to be deceptive.

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

\6\ The term ``rebuilding'' means that the dealer dismantled and

reconstructed the transmission as necessary, cleaned all of its

internal and external parts and eliminated rust and corrosion,

restored all impaired, defective or substantially worn parts to a

sound condition (or replaced them if necessary), and performed any

operations required to put the transmission in sound working

condition.

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

* * * * *

6. Section 260.8 is revised to read as follows:

Sec. 260.8 Environmental assessment.

(a) National Environmental Policy Act. In accordance with section

1.83 of the FTC's Procedures and Rules of Practice 7 and

section 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), 8 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.'' 9 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.

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

\7\ 16 CFR 1.83.

\8\ 40 CFR 1501.3.

\9\ 16 CFR 1.83(a).

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

(b) The Commission has concluded that the 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 and the modifications to the guides in 1996 were 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 issuance of the 1998 modifications to

the Guides for the Use of Environmental Marketing Claims.

By direction of the Commission.

Donald S. Clark,

Secretary.

[FR Doc. 98-11455 Filed 4-30-98; 8:45 am]

BILLING CODE 6750-01-P