Law Times

Law Times • November 17, 2014 Page 11 www.lawtimesnews.com Greenwashers warned about legal risks By arshy mann Law Times ore than ever, it pays to be green as com- panies increasingly put out products that claim to be environmentally friendly in order to go after envi- ronmentally conscious consum- ers. But companies that engage in so-called greenwashing could be opening themselves up to lawsuits and regulatory action. Greenwashing refers to false environmental claims made by companies or individuals. Marc McAree, a partner at Willms & Shier Environmental Lawyers LLP, says greenwashing could be happening in "every sin- gle industry that advertises them- selves as bringing to the market an environmentally friendly or eco-friendly product." In the United States, the Feder- al Trade Commission has become increasingly aggressive on clamp- ing down on those sorts of false claims. Last year, the commis- sion engaged in 14 enforcement actions, including against major U.S. companies like Amazon.com Inc., Sears, and Macy's Inc. One of the actions ended with a $450,000 fine against a packaging company for falsely advertising its products as biodegradable. In Canada, while the Compe- tition Bureau has gone after gre- enwashing in the past, those ef- forts appear to have slowed down. The Competition Bureau can go after greenwashing through the Competition Act, the Con- sumer Packaging and Labelling Act, and the Textile Labelling Act. The Competition Act allows for a maximum civil penalty of $50,000 for an individual and $100,000 for a corporation, while the two labelling statutes give the Competition Bureau the right to engage in product seizures along with fines. In 2007, the Competition Bu- reau persuaded Vancouver-based Lululemon Athletica Inc. to re- move any claims of therapeutic benefit from its Vitasea line of clothing made from seaweed. The next year, the Competi- tion Bureau released a guide on environmental claims by indus- try and advertisers that outlined best practices for companies. The guide is voluntary, however. After announcing in 2009 it was going after companies that make false energy-saving claims, the Competition Bureau targeted hot tub and spa retail- ers that wrongly claimed their products were eligible for En- ergy Star certification. While it was able to persuade many retailers to remove the mes- saging voluntarily, two compa- nies didn't comply. But in 2011, the Competition Bureau took enforcement action against them, forcing them to comply and fin- ing them $130,000. However, while the U.S. trade commission has been steadily increasing actions on green- washing, the Competition Bu- reau hasn't publicly announced one for three years. "I just haven't seen any enforce- ment recently and a regulatory system has to have enforcement or it doesn't work," says environ- mental lawyer Dianne Saxe. "The Competition Bureau could do more to add clarity, to insist on clear definitions, and to actually hold some people to it," she adds. McAree, meanwhile, notes regulatory action isn't the only thing companies need to be aware of. "Certainly, there's potential for class actions, there's potential for individual actions," he says. "There's the potential for those lawsuits to be framed in fraud, be it negligence in the context of the fraud or be it a criminal fraud." According to McAree, claims could also allege misrepresenta- tion or breach of contract in the case of a supplier-manufacturer agreement where the supplier misrepresents certain inputs into its product. "You better know what you're putting out," says McAree. "You better have a true un- derstanding of the environmen- tal benefits and you better not mislead the public; otherwise, those individuals or corpora- tions and directors and officers of those corporations could very well find themselves on the wrong end of either a regulatory pursuit or a civil action." LT OntariO EnvirOnmEntal PrOtEctiOn act annOtatEd Dianne Saxe, LL.B, Ph.D. Get all the latest Ontario environmental rules and cases conveniently annotated with expert commentary. almost every section of the act is accompanied by an explanation of its meaning and practical effects, along with cross-references that quickly guide you to other relevant provisions. annotations include digests of every relevant reported case under each section of the act, plus digests of significant unreported cases and tribunal decisions you won't find in any other resource. ConCise information in eaCh volume • Regulations made under the Environmental Protection Act and the environmental Bill of Rights • The purpose and effect of the sections of the Environmental Protection Act and the environmental Bill of Rights, and their place in the overall legislative scheme • an extensive collection of cases setting out the penalties for every offence • a convenient catalogue of reported and unreported cases from both the courts and administrative tribunals • Cross-referenced table of cases to facilitate research reCent updates inClude disCussion of: • The intersection of environmental law and insolvency law as seen in Nortel Networks, Re (Ont. C.a.) and Northspace Aerospace (Re) (Ont. C.a.) • The failure to comply with provisional certificates of approval as seen in R.v. 349977 Ontario Inc. (2013 Ont. C.J) • The breach of a Provincial Officer's Order relating to cleanup in a propane explosion, as seen in Ontario (Ministry of Labour) v. Sunrise Propane Energy Group Inc. (2013 Ont C.J.) • The ability of the Ministry of environment to issue no-fault orders to innocent property owners, as seen in Kawartha Lakes (City) v. Ontario (Director, Ministry of the Environment) (2013 Ont. C.a.) available risk-free for 30 days order online: www.carswell.com Call toll-free: 1-800-387-5164 in toronto: 416-609-3800 OrdEr # 804112-65203 $563 3 volume looseleaf supplemented book 3-5 supplements per year anticipated upkeep cost – $160 per supplement Supplements invoiced separately 0-88804-112-8 Shipping and handling are extra. Prices subject to change without notice and subject to applicable taxes. ExpErt analysis of thE EnvironmEntal ProtEction act and EnvironmEntal Bill of rights Water law experts Julie Abouchar and Theresa McClenaghan bring you the benefit of their expertise in Ontario Water Law. You'll find all the provincial and federal legislation and regulations that govern water in Ontario – all expertly annotated with cases from the courts, tribunals and prosecution disposition reports. Get the information and guidance that will help you protect and manage water • Comprehensive coverage gives you fast access to water law with authoritative interpretation • Expertly written summaries of significant case law help you quickly review the offences, fines and possible defences • Insightful explanations of key provisions and statutes provide the context needed to fully understand the compliance requirements Gain clarity on water law in Ontario New Publication Ontario Water Law Julie Abouchar, B.Sc., LL.B., LL.M. and Theresa McClenaghan, LL.B., LL.M. Available risk-free for 30 days Order online: www.carswell.com Call Toll-Free: 1-800-387-5164 In Toronto: 416-609-3800 Order # 804721-65203 $275 September 2014 2 volume looseleaf supplemented book 1-2 supplements per year Supplements invoiced separately 978-0-88804-721-2 00221YL-A44988 Shipping and handling are extra. Price(s) subject to change without notice and subject to applicable taxes. "This book is most timely. This is a valuable contribution and will assist lawyers, regulators and policy makers in protecting and managing one of our treasured resources – water." – from the foreword by The Honourable Dennis O'Connor, Q.C. CANADA LAW BOOK ® M FOCUS

• Cover